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Alliance signs new E190 fleet service agreement with Embraer

written by Hannah Dowling | September 21, 2021
VH-UYZ Alliance Airlines E190 AA (Dave Soda)
VH-UYZ Alliance Airlines E190 AA (Dave Soda)

Alliance Airlines has signed a multi-year services agreement with Embraer for the planemaker to provide materials support for its growing fleet of E190s.

Alliance currently boasts a fleet of 12 E190s in service in Australia, with an additional 20 aircraft on order and scheduled for delivery over the coming 12 months.

Over 300 repairable components are covered under the new agreement with Embraer, as well as materials and technical administration services. Alliance will be able to access service and support via Embraer’s Asia-Pacific facility in Singapore.

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According to Embraer, Alliance will benefit from significant savings in repair and inventory carrying costs by opting in to its Services and Support offering.

“The Repair Management Service Program we have with Embraer will enhance our fleet performance and strengthen our business as it grows,” said Lee Schofield, Alliance Airlines chief executive.

Johann Bordais, president and CEO, Embraer Services & Support, said, “We are glad to partner with Alliance Airlines at this pivotal moment.

“Alliance Airlines has rapidly grown its fleet of E-Jets, which has proven to be instrumental as domestic aviation grows in Australia. This services agreement will enable Alliance to secure their fleet availability with effective, efficient and competitive solutions.”

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Alliance first announced in August 2020 that it had penned a $111 million deal to purchase 14 of the 114-seat Embraer E190s, while much of the industry continued to navigate the deep trough of the COVID-19 pandemic.

“Alliance, since inception in 2002, has a track record of purchasing aircraft at opportunistic times and at significantly reduced value to their market value,” said managing director Scott McMillan.

Since then, Alliance has bolstered its E190 order to 30 jets in total, and come out as one of the few success stories of the COVID-19 pandemic.

The airline posted a record profit of $34 million after tax for the 2020-21 financial year, despite the pandemic, largely off the back of strong contract and charter demand.

Notably, in February 2021, Qantas signed an initial wet lease agreement with Alliance for the use of three of its E190s, which has since been increased to eight aircraft, in its efforts to cash in on post-COVID domestic tourism markets.

The airline began flying all five in March 2021.

Alliance has said it plans to see a three-fold increase of its annualised flight hours by the end of 2022, off the back of its majorly discounted E190 orders, 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 announce 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.”

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