Alliance Aviation flying high on $111m fleet boost
3 August 2020, Written by Matt Ogg
While most airlines have been flailing since the outbreak of COVID-19, Alliance Aviation Services (ASX: AQZ) has floated on cloud nine thanks to resource sector exposure and government support to bolster tourism.
That momentum has continued today with the announcement of a US$79.4 million (AUD$111.16 million) fleet acquisition package with US-based Azorra Aviation LLC, sending the AQZ shares more than 7 per cent higher to $3.34 each this afternoon.
The acquisition is worth more than the take-up of a recent capital raising comprising a $91.9 million placement and a share purchase plan (SPP) that was well short of its $30 million objective at $3.8 million.
However, anyone who took part in that SPP would be looking at a 17 per cent windfall after today's announcement, after the company followed through aggressively on its promise to buy additional aircraft with the proceeds.
The deal includes the following aviation equipment and terms:
Alliance managing director Scott McMillan says the fleet acquisition is another milestone for Alliance and is a 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," McMillan said.
"Our Fokker fleet remains the core of our fleet and we believe will remain in service for many years to come, especially given our significant spare parts and inventory stores.
"With limited Fokker aircraft acquisition opportunities, it was also the time to acquire a newer aircraft in order to position us for our next growth phase."
Qantas held a 19.9 per cent stake in Alliance prior to the recent capital raising, but due to dilution that holding has likely fallen to around 15 per cent.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg