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Charter and FIFO operator Alliance Airlines is expecting a “record” profit before tax in the 2024 financial year.
In a trading update posted to the ASX, Alliance predicted pre-tax profits exceeding the consensus forecast of $83.9 million, with full-year results to be released after the close of trade on 14 August.
“This will be an uplift in profit before tax of in excess of 60 per cent over FY23,” the airline told the ASX.
“This will include a profit in the company’s Aviation Services operation, resultant from the sale to a European operator, of five General Electric CF-34-10 engines from recently parted out E190 aircraft and from inventory.
“The full cash proceeds of approximately $25 million will be received prior to the end of this financial year, reinforcing the integral part that aviation services plays in the company’s revenue mix.”
The news follows Alliance this month renewing contracts with two major mining clients, coal miner Glencore and gold miner Newmont, with managing director Scott McMillan saying they were a testament to the airline’s success.
“Alliance is the leading FIFO operator in Australia, providing an essential service to major resource players like Newmont, providing the safe and on-time transportation required in any efficient mining operation,” said McMillan.
Alliance operates 35 Embraer E190s and 38 Fokker 70/100s, with 21 more E190s still on order, making it the largest E-Jet operator in Australia.
The carrier last year signed a deal to buy 30 more E190s from Ireland-based lessor AerCap, though delays in the delivery schedule mean it will receive only 12 of these planes in 2024 rather than 17.
McMillan said last month that fleet ownership is “fundamental to the [airline’s] business model”.
“It underpins our operational performance with Alliance having ultimate control of our fleet units, thus providing flexibility, particularly around maintenance,” he said.
“The 2023 Aircraft Acquisition Programme is a significant growth initiative we are currently successfully implementing.
“Securing funding against this initiative highlights our strong financial status, particularly our long dated contracted revenue streams from a predominately investment grade customer base.”
The 2023–24 results will be the first since Qantas and Alliance officially walked away from the Flying Kangaroo’s takeover bid in October, acknowledging there was “no reasonable path forward” for the deal after it was opposed by the ACCC, though Qantas still owns a 20 per cent stake in Alliance. The agreement that sees Alliance fly up to 30 E190s for Qantas has also continued.
