Alliance Aviation Services expresses confidence in business strategy and second half outlook

7 February, 2018

Alliance Aviation Services outlined (07-Feb-2018) the following business strategies and outlook for H2FY2017/2018:

Business strategy:

  • Alliance continues to experience increased flying activity across all revenue types and expects the level of activity to continue into H2FY2017/2018;
  • Received confirmation in Jan-2018 of contract renewal with Newmont Mining Services. Under the renewal, Alliance will set up a Darwin operating base in Feb-2018 which will service this contract, as well as provide capacity for other airline operations;
  • Wet lease flying continues to be consistent with expectations with Alliance continuing to seek further opportunities with carriers throughout Australia;
  • Carrier's strategy of diversifying revenue sources continues to be a focus with a substantial level of interest being shown by various inbound and domestic tourism organisations for both short and longer tours within Australia;

Outlook remains positive overall, due to:

  • Historical trend of flying activity for contract clients being stronger in the second half of the year than the first half. Alliance Aviation Services expects it will reach its projected flying hour increase of 45% year-on-year for FY2017/2018;
  • Renewed confidence in the resources sector, demonstrated with increases to schedules and flight frequency with existing contract clients which Alliance Aviation expects to continue;
  • Demand for charters increasing as the year has progresses. Alliance has increased charter flights and in some cases contracted for short to mid-term repeat flying into H2FY2017/2018;
  • Wet lease flying for other operators is stable and meeting expectations;
  • Investment in additional aircraft, crew and engineering staff over the past six months will allow the group to fulfil additional capacity requirements from current and prospective clients. This investment had both a cash flow and cost impact for H1FY2017/2018;
  • Three more aircraft are scheduled to enter service in H2FY2017/2018. These aircraft will service further growth opportunities and allow for capacity coverage required due to the existing fleet heavy MRO programme;
  • The Group is investing in the part sales business with the leasing of a fit for purpose warehouse, the implementation of part sales specific warehousing and sales software and the recruitment of staff to support this area of the group's business. Aviation services will continue to be a core part of the diversified Alliance business. [more - original PR]