Qantas must allay regulatory fears that its proposed takeover of Alliance Airlines will not eliminate a key competitor in the charter fly-in, fly-out (FIFO) market or substantially lift costs for rural flying to get the $614 million deal back in the air.

The airline was dealt a blow on Thursday when the Australian Competition and Consumer Commission issued a statement of concerns. While ACCC chairwoman Gina Cass-Gottlieb stopped short of killing the buyout entirely, the onus is now on Qantas to show why the deal should proceed.