Alliance Aviation retains positive FY2019 outlook; room to grow charter, service and lease revenue

    Alliance Aviation Services Limited reported (09-Aug-2018) it retains a positive outlook for FY2019 based on continued growth in revenue across all sectors and regions. Key aspects of the outlook include:

    • The resources sector continues to show signs of growth with commodity prices of Alliance’s customers performing strongly. Increases in services and frequency are expected from Alliance’s existing resource sector clients, in addition to new mines that are being established;
    • Wet lease revenue will continue to grow in FY2019 “as a result of Alliance being one of the few airlines in Australia that is able to provide additional capacity for these services”;
    • Alliance noted opportunity exists to increase charter revenue, with a focus on inbound and domestic tourism operators as a result of additional aircraft in FY2019 and a general increase in charter activity;
    • Regular passenger transport is expected to remain stable with no increase in flight hours expected in FY2019, while charter activity is forecast to increase due to the market strengthening and Alliance being able to service this market due to the increase in aircraft in service both currently and into the future;
    • Aviation services will continue to increase revenue, profitability and cash flows from underlying activities, including part sales, engine and component leasing, aerodrome management services and engineering services;
    • Increasing value from the AUD51 million (USD37.6 million) inventory balance will continue to be recognised as Alliance positions itself as the part supplier of choice to all Fokker operators in Asia Pacific and to a number of operators in Europe;
    • Sustaining capital expenditure for FY2019 will increase marginally to between AUD23 million (USD17 million) and AUD25 million (USD18.4 million) as a result of additional aircraft entering the fleet;
    • Operating cash flows are forecast to increase in FY2019. Alliance will benefit from a reduced debt amortisation profile, the sourcing of spare parts from stock rather than purchasing parts and an increased contribution from flying activities and other aviation services. [more – original PR]