The planned takeover of the Australian regional airline Alliance Airlines by the competitor Qantas has come to a standstill. The competition authority has raised concerns about the transaction.

Australia's Competition and Consumer Commission (ACCC) believes that Qantas' purchase of Alliance Airlines could result in competition in the continent's outlying areas being severely restricted. Qantas disagrees in a statement.

The Oneworld member already owns almost 20 percent of Alliance Airlines and reached an agreement in May 2022 to take over the charter specialist in full, subject to regulatory approvals. Qantas also points out that it is already Alliance Airlines' largest customer. The latter carrier operates numerous domestic routes on behalf of the Oneworld member.

“There is a significant number of charter providers of different sizes and this makes this segment an extremely competitive area. We are confident that the acquisition of Alliance will not significantly reduce that competition and we will work through the ACCC process to reinforce that position and address their initial concerns," Qantas said in a statement.

The ACCC said the merger would bring together two of the three largest air carriers in remote regions and eliminate Alliance as Qantas' only competitor on certain routes. “Based on our preliminary assessment, significant barriers already exist for airlines wishing to operate or expand operations in regional and remote areas, including access to pilots, airport facilities and infrastructure, and associated regulatory approvals. Eliminating Alliance as a wet-lease provider, or raising the price of wet-leases for Qantas' competitors, is likely to significantly increase these barriers," said Agency Director Gina Cass-Gottlieb.

Both companies now have until September 1, 2022 to submit a statement or to offer the competition authority concessions. The ACCC's final decision is scheduled to be announced on November 17, 2022.