Alliance Aviation Services is closing its Brisbane heavy maintenance base and will send its all-Fokker fleet to Europe for their regular heavy checks as part of cost-saving measures.
The heavy maintenance checks will be undertaken at Lufthansa subsidiary Austrian Technik Bratislava, which started working on Alliance aircraft in April when the company ended heavy maintenance in Adelaide and has successfully completed heavy maintenance overhauls on two aircraft.
Alliance said the move would result in an “immediate cash saving”, which meant total capital expenditure was forecast to be reduced by about of A$20 million per year.
“The cessation of heavy maintenance in Brisbane will impact 22 staff positions within the Alliance operation in Brisbane along with a small number of contractor positions,” Alliance said in a statement on Tuesday.
“The company will be able to offer some of the staff alternative employment within Alliance, and will support those who are being made redundant to transition to other employment.”
Redundancy costs would be about $800,000.
Alliance managing director Scott McMillan said the end of heavy maintenance in Brisbane was “part of ongoing structure and operating changes to improve the company’s long term profitability”.
The airline has moved to reduce costs and improve fleet utilisation, as well as protect existing contracts and secure more non-mining related work, in response changing market conditions and after posting to a first half loss.
In addition to sending heavy maintenance work overseas, Alliance also sold two Fokker 100s in May.
“Through these and other measures we will maintain our position as the leading provide or contracted aviation services in Australia,” McMillan said in a statement on Tuesday.
“The change at Brisbane will have no effect on our services to the resources sector, or our diversification into tourism-related and other sectors across Australasia.”
Alliance said it would continue to perform line maintenance work at Brisbane, Perth, Adelaide, Cairns, Townsville, Melbourne and Auckland.
The company was due to hand down its 2014/15 full year results on August 13.
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