Qantas has taken a 19.9 per cent stake in Alliance Airlines which flies the Bundaberg to Brisbane route under a code-share agreement with Virgin Australia.
In a statement issued on Friday, Qantas said Alliance is a profitable, well-managed business with high levels of operational maturity.
“It is also a long-term provider to the Qantas Group and flies regional services on behalf of the national carrier,” the statement said.
“The 19.9 per cent stake was acquired for an average price of $2.40 per share and for a total cost of $60 million.”
Qantas expects to ultimately seek regulatory approval from the ACCC to build on its current shareholding, with a longer-term view of taking a majority position in Alliance Airlines “to better serve the charter market by unlocking synergies”.
In the meantime, Qantas is supportive of the “business as usual” approach of Alliance Airlines management and is not seeking board representation.
Alliance Airlines is Australia's major fly-in, fly-out (FIFO) air-charter operator. The company also operates commercial passenger services to Bundaberg, Gladstone and Port Macquarie using 80-seat Fokker 70 aircraft.
Founded in 2002 with just three aircraft, today Alliance boasts a fleet of 40 Fokker aircraft, employs more than 500 staff and provides regular and adhoc charter services in Australia and New Zealand.
Last month Alliance announced $125 one-way, advance-purchase fares between Bundaberg and Brisbane if booked at least 21 days ahead.
Virgin quit the Bundaberg route in July 2017 when it handed over to Alliance.