ALLIANCE Aviation Services will significantly expand its fleet, having entered into a US$79.4m (A$111.1m) agreement with aircraft leasing company Azorra Aviation to acquire 14 Embraer E190 aircraft.
The deal will be funded from proceeds of the $91.9m placement & share purchase plan which raised $3.8m (TD 14 Jul).
Alliance MD Scott McMillan said the deal was the result of many years of considered planning.
“With many airlines not flying and the increased demand for a 100-seat narrow body configured aircraft in the Australian market, this acquisition is more than opportunistic, it underpins our expected growth phase,” he said.
The deal also includes a significant package of related inventory, group support equipment, tooling and training devices and the purchase of six spare General Electric CF34 engines.
Alliance has the option to acquire a further five E190 aircraft and a full flight simulator and related training equipment.
Aircraft will be progressively delivered over eight months from Sep and will undergo repainting with Alliance livery, prior to being delivered to Australia.
Financial settlement will be matched against deliveries and the first revenue from an E190 is expected to be realised in Feb.
The company is expecting the new E190 aicraft to predominantly fly regional routes.
“Given the reduced pax on mainland routes due to COVID-19, the E190 has the potential to be the perfect aircraft type for some mainline routes,” he said.
McMillan said Alliance’s Fokker planes remained the core of the Alliance fleet and would stay in service for many years to come, but noted that with limited Fokker acquisition opportunities it was “the time to acquire a newer aircraft in order to position us for our next growth phase”.
The ACCC is currently investigating Qantas’ acquisition of a 19.9% stake in Alliance last year (TD 01 Jun) which blindsided the carrier and its regional partner VA (TD 01 Feb 2019).
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Source: traveldaily