Australia's competition watchdog says the Qantas investment in Alliance Airlines is likely to lessen competition in the charter and fly-in/fly-out market.

Alliance Airlines says it will add three more aircraft to its Darwin base and recruit additional staff in response to growing demand from the tourism and mining sector.

Alliance Airlines plans to establish what managing director Scott McMillan describes as a new "significant operational base" at Rockhampton.

Virgin Australia has transferred its Brisbane-Port Moresby service to Alliance Airlines in order to free up a Boeing 737-800 for its trans-Tasman network.