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Alliance sees record profit despite pandemic as charter demand soars

written by Hannah Dowling | August 13, 2021
VH-UYZ Alliance Airlines E190 AA (Dave Soda)
VH-UYZ Alliance Airlines E190 AA (Dave Soda)

Alliance Airlines has posted a record profit of $34 million after tax for the 2020-21 financial year, despite the COVID-19 pandemic, off the back of strong contract and charter demand.

The airline is now looking to bring forward the deployment of its E190 aircraft, and suggested it will continue to hire new pilots, cabin crew and ground staff to support the speedy deployment.

Alliance said that while its wet lease and regular public transport (RPT) operations fell due to border closures throughout the year, its charter revenues increased by 66 per cent on last year’s figures, while its flying hours for charter operations jumped 83 per cent.

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Meanwhile, contract revenue, which includes the airline’s FIFO operations in the mining and resource sectors, increased 6 per cent year-on-year, as the airline revealed four material contract renewals and four new contract clients over the 2020 financial year.

Other operations did see a rebound through the second half of the financial year as COVID restrictions largely eased, Alliance said.

The company also revealed that it accepted $8.8 million in aviation-related government assistance.

Since the beginning of the pandemic, many charter operators have similarly reported significant increases in demand, as the flying public shied away from commercial services due to COVID fears.

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“Alliance has produced a record result at a time when we are investing heavily in supporting the growth of the business,” said Alliance Airlines managing director Scott McMillan.

“The underlying business, utilising the Fokker fleet, continues to reap the benefits of past planning and investment and is the financial and operational foundation on which the E190 expansion has been built.”

McMillan said the airline made the decision to bring forward the deployment of its newly-acquired Embraer E190 due to “earlier than expected capacity demand”, at an additional operating cost of $11.5 million.

The company now expects to have at least 14 E190 aircraft in service by December 2021, with the balance deployed by mid-2022.

The airline also re-stated its plan to see a three-fold increase of its annualised flight hours by the end of 2022, off the back of majorly discounted E190 orders made in the last year, while it continues to bolster its position in the wet lease market.

“We see ourselves as a wholesaler,” McMillan said in June, explaining why this tactic is what he sees as the future of the carrier.

“There’s a global trend that Qantas is following which is to have much higher frequency, smaller aircraft flying point-to-point, so bypassing the large hubs. You’ll be able to fly city pairs [non-stop] that you’ve never thought of and that’s really good for the flying public.”

In addition to wet-leasing, Alliance has been able to cash in on an unprecedented drop in domestic commercial airline flights, which McMillan said resulted in a new surge of demand for FIFO services.

In May, the airline also became one of the first major Australian companies to announced that it would make COVID-19 vaccination mandatory for all its employees and contractors.

McMillan said at the time he had the backing of 95 per cent of his staff in making the move, and would be prepared to “test it in court” if there were any legal objections.

“Right throughout the industry there’s a big move towards people being vaccinated,” said McMillan. “All the senior management and directors have been vaccinated and we believe the way forward is for all of us to be vaccinated.”

Alliance is considered to be one of the few success stories of the pandemic, capitalising on the reduced schedule of larger carriers and the need for COVID-adapted planes.

In May 2020, the carrier announced it had actually increased profits that financial year by $7 million.

The good results allowed it to sign a deal for 14 new E190 jet aircraft in June 2020 and then a further 16 in December 2020. The aircraft join its existing fleet of Fokker F100s, Fokker 70LRs and Fokker 50 turboprops.

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Alliance sees record profit despite pandemic as charter demand soars Comment

  • Vannus

    says:

    Good on Alliance!
    Quietly going about its’ business with no fuss, helping folk to reach their destinations’ as required.

    Long may they continue.

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