Qantas buys Alliance Aviation in A$763m charter flight deal

QANTAS Airways agreed to buy the rest of Australia’s Alliance Aviation Services in a deal valuing the company at A$763 million (S$759.6 million), gaining a fleet of small aircraft operating charter flights for the resources industry.

The deal values Alliance at A$4.75 a share, Qantas said in a statement Thursday (May 5). The stock closed Wednesday at A$3.51. Alliance shareholders will be paid in shares in Qantas, which already owns 20 per cent of the company.

Alliance operates about 70 jets - Fokkers and Embraer 190s - that can each seat as many as 100 people. That makes them well suited for charter flights in Western Australia for mining companies including Fortescue Metals Group and BHP Group.

Alliance shares soared 25 per cent to A$4.38 at 10.54 am in Sydney. Qantas fell 1.1 per cent to A$5.61.

Qantas, which also owns Fokker aircraft, said Alliance has a large inventory of spare parts for the planes which will extend the working life of the 2 companies’ combined fleets. BLOOMBERG