ALLIANCE AVIATION AXES MAINTENANCE DIVISION

Written on the 4 August 2015

ALLIANCE AVIATION AXES MAINTENANCE DIVISION

ALLIANCE Aviation Services Limited (ASX:AQZ) will discontinue heavy maintenance of aircraft at Brisbane Airport later this month, in a bid to secure its long-term financial position.

It follows the corporate travel provider's decision to close operations in Adelaide in April, after contracting Austrian Technik Bratislava (ATB) to complete the job.

ATB will manage all heavy maintenance of Alliance's fleet at a lower cost, with the quick turnaround offering increased revenue opportunities.

The cash saving has reduced total capital expenditure for aircraft maintenance to $20 million a year.

Alliance managing director Scott McMillan (pictured) says the closure forms part of the company's strategy to improve long-term profitability.

These include protecting existing revenue contracts, developing new revenue sources, improving fleet utilisation, lowering operational costs and enhancing cash flow through more efficient capital expenditure.

"Through these and other measures we will maintain our position as the leading provider of contracted aviation services in Australia," McMillan says.

"The change at Brisbane will have no effect on our services to the resources sector, or our diversification into tourism-related and other sectors across Australasia."

Closing heavy maintenance in Brisbane will impact 22 employees and a small number of contractor positions.

Alliance will offer some staff alternative employment within the company, with redundancy costs expected to be $800,000.

Line maintenance will continue at Brisbane, Perth, Adelaide, Cairns, Townsville, Melbourne and Auckland.

 


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