summary
- Alliance Aviation Services is Australia’s leading provider of aviation and maintenance services, serving airlines such as Qantas, as well as the mining, energy and government sectors.
- The company’s financial results for the first half of its fiscal year 2024 showed a significant increase in profit and operating revenue due to higher contracted wet lease income.
- The Alliance aims to become one of the world’s largest operators of Embraer E190 regional jets, with a current fleet of 41 aircraft and a commitment to purchase a further 26 by mid-2026.
Alliance Aviation Services Limited (Alliance) is Australia’s leading provider of contract, charter and affiliate aviation services and maintenance services. The company is a wet lease operator for other airlines, including Qantas, and provides essential services to the mining, energy and government sectors, including national fly-in fly-out (FIFO) operations.
E190 is profitable
The Alliance also aims to become one of the world’s largest operators of Embraer E190 regional jets, with a current fleet of 41 Embraer E190s and a commitment to purchase 26 more by mid-2026. It has been. Last week, the Alliance announced its financial results for the six months to 31 December 2023, the first half of financial year 2024 (HY24).
Photo: Alliance Airlines
From July to December, the Alliance operated record flight hours, added two aircraft to its fleet, and achieved record financial results in the first half of its fiscal year. Alliance reported that HY24’s pre-tax statutory profit was A$37.7 million ($2,444). This compared to his AU$9.5 million ($6.3 million) in 2023 performance, an increase of 296% year-on-year.
Operating revenue increased by 27.2% from A$235.3 million ($155.3 million) in FY23 to A$299.4 million ($197.6 million) in FY24. This was primarily due to a significant increase in contracted wet lease revenues. Alliance managing director Scott McMillan said the airline’s performance in the first half highlighted the strength of the business, which grew in both activity and financial results. He added that contracted wet lease business continues to increase month on month and has “pleasantly more than doubled in the past year”.
“Our strategy to acquire additional aircraft units in advance of our immediate operational requirements has proven successful. We know there is incredible demand for jets of up to 100 seats in Australia. We know, this is the perfect size aircraft for FIFO, regional and subtrunk.” Our aircraft construction strategy allows us to fully capture this demand. ”
As at 31 December 2023, 22 of the 30 wet lease aircraft options under long-term contracts had been activated by Qantas, with a further three options coming into force in the second half of the financial year and a further option. is scheduled to take effect in July 2024. To meet these contract requirements, the company said it has continued to invest in recruiting and training pilots, flight attendants and engineers in advance of operational requirements to ensure service delivery when needed.
Wet lease flight time promotes growth
In the first half of 2024, the Alliance operated a record 50,793 flight hours. This is a 57% year-over-year increase and an 18% increase in the second half of fiscal year 2023 (Q2023-2023). The wet lease business operated 35,191 flight hours and 14,156 contract charter flights, of which 666 were ad hoc charters, 499 scheduled public transportation flights, and 281 other flights.
Photo: Embraer
Among the results, the Alliance said settlements for an additional 30 E190 aircraft from AerCap have been delayed and delays are expected to continue, with aircraft settlements extended by an average of three months. . Under the current schedule, delivery of nine aircraft is scheduled to be completed in fiscal 2024, 13 in fiscal 2025, and eight in fiscal 2026.
The Alliance also notes that up to 11 of these E190s may be disassembled for parts, with an initial 10 required for Alliance contracts and wet lease agreements, and the remaining nine unallocated. It also showed that it could be used for future growth or sales. The airline also said the latest acquisition price varied between A$7 million and A$12 million ($4.6 million and $7.9 million), depending on the jet’s remaining maintenance life.
Alongside 41 Embraer E190s, the Alliance has a fleet of 37 Fokker 70/100s and has three E190s on dry lease with third-party operators. The company employs over 1,300 people and has offices in Brisbane, Townsville, Cairns, Rockhampton, Adelaide, Perth and Darwin.
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