Alliance Aviation Soars with 9.5% Profit Rise and Record Flight Hours
Alliance Aviation Services has reported a robust half-year performance with a 9.5% increase in statutory profit before tax and record flight hours, underpinned by fleet expansion and strong wet lease demand.
- Statutory profit before tax up 9.5% to $41.3 million
- Revenue increased 11.3% to $333 million driven by wet lease growth
- Record 58,362 flight hours with 97% under long-term contracts
- Fleet expanded to 76 aircraft including E190 additions
- Board renewal with new Chairman James Jackson appointed
Strong Financial Performance Amid Rising Costs
Alliance Aviation Services Limited (ASX: AQZ) has delivered a solid first half for the 2025 financial year, reporting a statutory profit before tax (PBT) of $41.3 million, up 9.5% from the prior corresponding period. Revenue from operations climbed 11.3% to $333 million, buoyed by a significant increase in wet lease activity. Despite a challenging environment marked by rising operating costs and industrial relations pressures, Alliance’s management has successfully navigated these headwinds to grow earnings and operational output.
Record Flight Hours and Fleet Expansion Drive Growth
The company achieved a record 58,362 flight hours in the half, a notable increase from 50,793 hours in the previous period, with 97% of these hours secured under long-term contracts. This operational milestone reflects Alliance’s strategic focus on reliability and contract stability. The fleet grew to 76 aircraft, including four new Embraer E190s, supporting the company’s expanding wet lease commitments, particularly with Qantas, which has exercised all 30 wet lease aircraft options. This fleet expansion is central to Alliance’s growth strategy, enabling it to meet rising demand in the mining, energy, and government sectors.
Investment in Maintenance and Cost Management
Alliance continues to invest heavily in its infrastructure, with $103.5 million spent on capital expenditure during the half, including the build-out of the E190 fleet and the Rockhampton maintenance facility. The latter commenced its first E190 base maintenance check in December 2024, a strategic asset that reduces reliance on international providers and is expected to lower future maintenance costs. Despite inflationary pressures, the company has maintained a disciplined approach to cost control, balancing investment with operational efficiency to protect margins.
Board Renewal Signals Strategic Continuity
The half also saw significant leadership changes with the retirement of long-serving Chairman Stephen Padgett, co-founder of Alliance, who will remain as a strategic advisor. James Jackson, an experienced director with a strong background in capital markets and regional business, has been appointed Chairman. Additionally, Bernie Campbell, an expert in equipment finance and leasing, joined the board. These changes suggest a focus on strengthening governance and capital management as Alliance pursues further growth opportunities.
Outlook Remains Positive with Growth Opportunities Ahead
Looking forward, Alliance maintains its FY2025 guidance with a consensus forecast PBT of $92.9 million and EBITDA of $202.1 million. The company plans to deploy the final wet lease aircraft to Qantas and add another dry lease aircraft in the second half. The Rockhampton facility is expected to deliver increasing operational benefits, while ongoing investments in technology and fleet expansion position Alliance to capitalise on the buoyant global aviation market. The decision to retain capital and suspend dividends underscores a commitment to funding growth and asset monetisation strategies.
Bottom Line?
Alliance’s half-year results underscore its resilience and strategic positioning, setting the stage for continued growth amid evolving market dynamics.
Questions in the middle?
- How will rising operating costs and industrial relations challenges impact Alliance’s margins in the second half?
- What is the timeline and expected financial impact of monetising the company’s extensive aircraft inventory?
- How will the new board leadership influence Alliance’s strategic direction and capital allocation?
