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Alliance Airlines is cutting seven E190 jets from its wet-lease arrangement with QantasLink.
In a statement released to the ASX, the charter and FIFO operator said there will be a “staged reduction from 30 aircraft to 23 aircraft [in the agreement] over the course of FY27”, as well as a “meaningful increase in pricing” and a revised annual price escalation mechanism.
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The renegotiation of the contract was signalled late last year due to unexpected high costs.
“This agreement improves the expected returns and cash flow for Alliance and demonstrates the strength of our partnership with Qantas,” said Alliance managing director Stewart Tully.
“Alongside the broader actions announced today, the revised agreement represents an important early step in our transformation program, which is required to improve Alliance’s operational and financial resilience and position the business for sustainable long-term performance.”
Alliance earlier this year recorded a $105.8 million loss in the back half of 2025, having written down the value of its ageing Fokker 70 and 100 jets.
In a separate ASX statement, Alliance said anticipated improvements in its financial position remain “subject to a range of assumptions and risks, including operational performance, aircraft utilisation, customer demand, fuel costs, labour availability and broader economic conditions”.
“In connection with the revised agreement, there will be associated operational initiatives and organisational changes at Alliance which include right sizing the business,” the carrier said.
“Accordingly, the impact of the revised wet lease agreement on the financial performance of Alliance cannot be considered in isolation, as the financial performance of Alliance will also depend on the impact of the associated operational initiatives and organisational changes.
“Having regard to these considerations, Alliance provides preliminary guidance that FY27 underlying profit before tax (PBT) is expected to be in the range of approximately $55 million to $60 million, based on current operating assumptions including the changes arising from the revised Qantas wet lease agreement and timing of the associated operational initiatives and organisational changes.”
According to Alliance, its profitability in the first half of the financial year was impacted by “a major wet-lease customer arrangement which is currently in the process of being negotiated, higher than expected maintenance costs, and costs associated with the AVIAN program implementation”.
The carrier had previously signalled a downgrade in its forecast EBITDA for the year to around $190-$210 million.
Qantas has been contacted for comment.
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