News: AQZ UPDATE 1-Aussie regulator opposes Qantas' acquisition of Alliance Aviation

(Updates with detail on regulator's review, Alliance response)

April 20 (Reuters) - Australia's competition regulator said on Thursday that it was opposing Qantas Airways Ltd's (QAN) proposed A$610.8 million ($409.48 million) acquisition of Alliance Aviation Services Ltd (AQZ) as it would substantially reduce competition.

Qantas and Alliance are key players in providing air transport services to mining and resources companies in Queensland and Western Australia.

The Australian Competition and Consumer Commission (ACCC) in its delayed review said the proposed transaction could substantially lessen competition in the charter operating sector in the two states.

"We consider Alliance to be an important competitor to Qantas, and the removal of Alliance is likely to substantially lessen competition threatening increased prices and reduced service quality for customers," ACCC Chair Gina Cass-Gottlieb said.

Alliance said in an exchange filing that there was a "strong industrial logic" for it to be a part of the Qantas group and that it would closely consider its options before deciding on future steps.

Separately, Qantas said it wanted more information from the regulator on its decision, adding that it was confident the acquisition would not impact competition in any market. ($1 = 1.4916 Australian dollars) (([email protected]; Twitter: https://twitter.com/sameer_manekar))