The Qantas Airways Limited (ASX: QAN) share price is in negative territory on Thursday.
This comes after the competition watchdog signalled its concerns about Qantas' monopoly in the domestic travel market.
At the time of writing, the airline operator's shares are down 0.62% to $4.79.
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ACCC outlines preliminary competition concerns
In today's release, Qantas informed the market of the latest saga regarding its proposed acquisition of Alliance Aviation Services Ltd (ASX: AQZ).
The statement of issues published by the Australian Competition & Consumer Commission (ACCC), expressed concerns about the Qantas merger and how it will negatively impact competition.
Qantas and Alliance provide air transport services to regional and remote areas across the country. This includes operating routes for mining and resource companies that need to transport 'fly-in fly-out' workers.
If the acquisition goes ahead, it would mean that Qantas would control two of the top three air transport services in Queensland and Western Australia.
For example, Alliance is the only competitor to Qantas on the Brisbane-Moranbah regional passenger transport route.
As industry participants have expressed strong concerns, the ACCC is considering the level of competition provided by other airlines. Virgin and Cobham's regional services arm, which was recently purchased by Regional Express Holdings Ltd (ASX: REX) also operate regional and remote routes.
ACCC chair, Gina Cass-Gottlieb said:
Our preliminary view is that there are already significant barriers for airlines who want to enter or expand their operations in regional and remote areas, including access to pilots, airport facilities and infrastructure, and associated regulatory approvals.
… A competitive and well-functioning aviation sector is fundamental to the Australian economy.
Furthermore, the ACCC is also looking into how the removal of Alliance's aircraft leasing services would affect the other competitors.
Alliance is a key supplier of wet-leased medium-sized aircraft to other airlines. Wet-leases are arrangements where an airline leases a plane, crew, and other related services from another airline or business.
Despite the update, investors appear to have largely shrugged off the news with the Qantas share price travelling slightly lower.
On the other hand, the Alliance Aviation share price is down 3.66% to $3.42 apiece.
Qantas share price snapshot
Since the start of 2022, Qantas shares have travelled on a rollercoaster, posting a loss of around 5%.
However, when looking at a larger time frame such as the last 12 months, its shares are up 8.5%.
Qantas commands a market capitalisation of approximately $9 billion, making it the 59th largest company on the ASX.
