ALLIANCE: Leasing 14 Embraer 190 aircrft to Qantas

Alliance Aviation Services Limited is going to wet lease up to 14 Embraer 190 Aircraft to Qantas in a newly signed 3-year agreement. The aircraft has been recently acquired by Alliance and will be available to Qantas from mid-2021. Initially only 3 aircraft will be leased, but another 11 will be available if required.

Routes

The aircraft will be based in Adelaide and Darwin, and will service the following routes:

• Adelaide–Alice Springs
• Darwin–Alice Springs
• Darwin–Adelaide

Alliance is a major player in the Australian/Pacific wet-lease market. Qantas last year (2020) became Alliance’s largest shareholder with a stake of just shy of 20% – sufficient to attract the attention of the regulator, the Australian Competition and Consumer Commission (ACCC).

Embraer 190 Aircraft

Alliance has invested heavily in the E190 aircraft, acquiring 30 of them recently with an eye to wet-leasing them to other airlines. Alliance regards the roughly 100 seater aircraft as the ‘sweet spot’ in post-COVID-19 regional aviation market.

“This is an exciting transaction for Alliance and further extends on previous wet-leasing arrangements that Alliance has had with Qantas since 2012.”

Scott McMillan, Alliance’s Managing Director

The news came in a report to the Australian Stock Exchange, as a ‘material transaction’, expected to provide more than 5% of Alliance’s total revenue once the initial 3 aircraft are deployed.

Employment opportunities

In a market filled with bad news for airline employees, including the possible loss of 3,000 staff by Virgin Australia, if the ‘JobKeeper’ subsidy is not extended beyond March, this announcement will provide some new employment possibilities.

“It is also pleasing to be able to provide new job opportunities in the Australian aviation landscape, as well as for our existing staff and potentially some Qantas Group staff who would normally be flying internationally.”

Scott McMillan, Alliance’s Managing Director

2PAXfly Takeout

This is another timely reminder to wear your seatbelt when seated. Holding you close to your seat will protect you from the sort of injuries sustained on this flight, when unsecured passengers flew to the ceiling of the aircraft, and then came crashing down once the ‘drop’ ceased.

The hope will be that this is an anomaly – a ‘freak accident’ in casual parlance. If it is a systemic error either mechanical or electronic, then this is a larger concern for the airlines that fly Boeing Dreamliner 787 aircraft. Let’s hope it isn’t. If it is, it will pile on the woes to Boeing’s existing stack.

Well, the news has already seen a 13% increase in Alliances share price. So the market has made its decision!

( I am a shareholder in Alliance. You can visit the ‘Terms & Conditions‘ page to see my interests in travel-related shares and loyalty schemes).