Alliance profit soars to 17-year high

Australia’s Alliance Aviation Services is bucking the global airline profit trend and says it expects to announce the best pre-tax result in its 17-year history. Alliance expects its 2019 pre-tax profit for the year ending June 30 to be $32.5 million, 25 percent higher than its fiscal 2018 result and ahead of analysts’ expectations. Chief executive Lee Schofield attributed the result to the company’s continued safety focus and market-leading on-time performance of 95 percent. “We jealously guard these attributes and support our team to deliver improvements for our customers,’’ he said in an ASX announcement released Thursday. Schofield also pointed to the company’s successful diversification strategy that allowed it to operate in four different flying categories to more than 50 destinations. These were contracted mining, contract mining and tourism, charter, wet leases and scheduled airline services. “Our current fleet of 38 aircraft operates across all categories of flying,’’ he said. “An additional aircraft will join the fleet this week and a further aircraft during July”’ By the end of the calendar year, Alliance will have 25 Fokker 100 and 14 Fokker 70 jets in its fleet as well as five Fokker 50 turboprops. The company’s success has attracted the attention of bigger rival Qantas, which earlier this year announced it had paid $A60 million to take a 19.9 percent stake in Alliance. READ: Qantas takes a stake in Alliance Airlines It also signaled that it wanted to take a majority stake in Alliance in the longer term to “better service the resources market”. Australia’s competition watchdog subsequently confirmed it was looking into the competitive impact of the deal. Qantas boss Alan Joyce said the carrier did not intend to have any involvement in the management of Alliance as a result of the 19.9 percent stake or seek a seat on the board. He also conceded that a move to take a majority stake would involve “a complex regulatory process and approval from the ACCC”.