Alliance Aviation Services Limited (“Alliance”) has today entered into an agreement with Jetran LLC, of the United States, to further expand its fleet through the purchase of 16 additional Embraer E190 aircraft and one spare General Electric CF34 engine.
The total acquisition price for the package is AUD85 million which will be funded through a mixture of existing cash facilities, operating cash flows and debt.
“Alliance has again taken advantage of its strong financial position and current market conditions to acquire these quality aircraft at compelling value. The 100 seat jet aircraft market globally will rebound quickly as carriers look to focus on total trip costs rather than traditional metrics,” said Managing Director, Scott McMillan.
The aircraft were previously operated by American Airlines and are in a 99 seat two-class cabin configuration and will deliver to Alliance over an eleven-month period beginning with five aircraft in December 2020 and then one a month until November 2021.
This additional capacity will be deployed to capture several growth opportunities across Australia including contract flying and wet and dry lease operations.
“The acquisition of these 16 aircraft is in addition to the previously disclosed acquisition of 14 E190 aircraft from Azzora Aviation. This transaction completes Alliance’s short-term fleet expansion strategy and while the Azzora transaction included options for five additional aircraft, these options will now not be exercised.” he said.
The E190 simulator purchased as part of the Azzora E190 transaction is currently in transit to Brisbane and will be utilised for most of the initial and all recurrent pilot training.
Alliance expects that the E190 will be added to its CASA Air Operator's Certificate during March 2021. There is forecast to be no material impact on the FY21 financial performance as a result of this acquisition, with the full year impact of the transaction expected in FY23.
Alliance will be releasing its half year results on Wednesday, 10° February 2021.