Expanding Alliance defies pandemic to post 19 percent profit increase

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August 13, 2021
Alliance
Photo: Alliance

Alliance Aviation says it has entered fiscal 2022 “with strong momentum” as it forges ahead with the deployment of Embraer E190s after defying the global aviation pandemic trend to post a 19 percent increase in profit.

The Queensland-based operator posted a statutory profit for fiscal 2021 of $A48.3 million as it maintained flight hours in the face of the COVID downturn and saw its underlying operating cash flow rise by more than 70 percent.

Alliance employs about 800 people and provides contract and charter services to the mining, energy, tourism and government sectors as well as other airlines. It also operates some regular public transport (RPT) services.

READ: New Zealand unveils path to reopening international borders.

The positive result comes at a time most airlines around the world are bathed in red ink and as the Australian carrier is investing heavily in growth.

Alliance managing director Scott McMillan attributed the result to the underlying charter business, supported by its fleet of Fokker jets and turboprops. The company operates 24 F100s, 14 Fokker 70LRs and five Fokker 50 turboprops.

Contract revenues were up 6 percent and charter revenues rose by two-thirds to more than offset falls in wet lease and RPT revenues.

McMillan said the charter segment continued to reap the benefits of past planning and investment and was the financial and operational foundation on which the E190 expansion had been built.

“This expansion program will provide the company with an increase in annualized flight hours of up to three times by the end of FY2022,’’ he said.

“Due to earlier than expected capacity demand, Alliance has brought forward investment required to deploy the E190 fleet.

“We have and continue to recruit pilots, cabin crew, engineers, and other operational and corporate staff to support the earlier deployment of the fleet.”

Alliance expects to have 14 E190s in service by December this year, servicing a mixture of wet lease and contracted clients, and plans to deploy the balance by mid-2022.

It has already paid for 26 of the Embraers and said the balance would be settled progressively to October 2022.

The company’s deployment plans would see five E190s deployed on specific Central Australian fly-in, fly-out (FIFO) routes and up to 18 aircraft operating its recently announced wet-lease agreement with Qantas.

Two aircraft would be dry leased, three aircraft would cover base maintenance checks and four would be used for additional “expansionary opportunities across the network”.

The five E190s to be used for Central Australian FIFO work would release five F100s which would be used to increase the West Australian fleet by 33 percent to service FIFO growth.

The airline said it retained a positive outlook for the 2022 financial year with “organic growth opportunities geographically and across the majority of revenue streams”.

“Alliance is entering the new financial year with strong momentum and intends to build on this with the E190 fleet expansion,’’ it said.

However, it did not declare a final dividend for the 2021 financial year, opting instead to retain the capital for its expansion program.