A Brisbane-based airline with a strong focus on charter flights has defied the aviation sector's doom and gloom with record profit and revenue for FY20.
After its shares reached new highs on the back of an aircraft acquistion deal funded by a recent capital raise, Alliance Aviation Services (ASX: AQZ) has reported a record full-year profit before tax (PBT) $40.7 million.
This represents a 24.1 per cent lift, while net profit after tax (NPAT) was up 18.9 per cent at $27 million.
Total revenue from operations rose 7.8 per cent to $298.6 million even though total flying hours were down slightly, as social distancing requirements for fly-in-fly-out (FIFO) clients led to additional income in the second half.
In fact, charter revenue almost doubled for the financial year overall while contract services were up 22.5 per cent. This helped offset the impacts of COVID-19 on wet lease, inbound tourism and regular public transport (RPT) service cash inflows.
Revenues for wet lease and and RPT services declined by 46.3 per cent and 15.9 per cent respectively due to restrictions of movement imposed by various governments in response to the pandemic.
Inbound tourism charters ceased operations altogether in March 2020 due to COVID-19 restrictions.
Alliance Aviation managing director Scott McMillan (pictured) describes the staff's achievements during the last six months as "truly remarkable".
"Alliance is pleased to release these results today as we continue to demonstrate the underlying robustness and diversity of Alliance's business model despite the impacts of COVID-19," says McMillan.
"The operational credibility on which Alliance has built its reputation is second to none, as demonstrated during the COVID-19 pandemic.
"Performance against our internal key performance indicators of safety, reliability/on-time performance and financial sustainability has again been outstanding."
During the year, five long-term contract renewals were completed with a 100 per cent retention rate, while the airline added four aircraft into the operating fleet which were required for capacity expansion.
In its results announcement today, the company also noted specific routes that had suffered due to the pandemic such as the suspension of Brisbane-Port Macquarie since April, and a reduction to minimum frequency levels for Brisbane-Gladstone and Brisbane-Bundaberg.
Adelaide to Olympic Dam services however continued as normal.
The airline retains a positive outlook for FY21, based on a number of ad-hoc contracts that have been awarded during the COVID-19 pandemic that it expects to be converted into long-term charter contracts, continued increased schedules for some charter clients even though the majority of social distancing on planes has ceased, the launch of new RPT routes and other expected new revenue sources.
Alliance is in a net cash positive position of $44.4 million as at 30 June 2020 due to the receipt of the placement funds in June 2020.
Updated at 10:11am AEST on 6 August 2020.