Alliance Airlines (QQ, Brisbane International) is set to acquire up to nineteen E190s as part of a fleet renewal drive that will see the incoming Embraer Regional Jets eventually replace the Australian carrier's current all-Fokker Aircraft fleet. The USD79.4 million transaction will be funded by proceeds from a June placement and share purchase plan (SPP).
A stock exchange filing said that as part of its agreement with Azorra, Alliance will acquire the following inventory:
- fourteen E190s with options for a further five of the type;
- a significant package of related parts, ground support equipment, tooling and training devices;
- six spare General Electric CF34 engines; and
- the option to acquire a full flight simulator and related training equipment.
The 14 firm jets are ex-Copa Airlines (CM, Panamá City Tocumen International) stock and will be repainted in Alliance's livery ahead of their deliveries which will run for a period of eight months starting in September. Financial settlement will also be matched with aircraft deliveries.
"This fleet acquisition represents 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," Managing Director Scott McMillan said.
“We are being conservative and are not forecasting any material impact on FY21 financial results as a result of this acquisition, with the first revenue from an E190 expected to be realised in February 2021.
“Alliance, since its inception in 2002, has had a track record of purchasing aircraft at opportunistic times and at significantly reduced value to their market value. Our purchase of 21 [Fokker] aircraft from Austrian Airlines (OS, Vienna) in 2015 resulted in significant growth opportunities as well as providing a long term supply of spare parts at minimal cost for our ongoing operations. Alliance is confident that this purchase of fourteen Embraer E190 aircraft will result in similar opportunities presenting themselves,” he added.
"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."
The ch-aviation fleets module shows Alliance Airlines operates thirty Fokker 100s, five Fokker 50s, and fifteen Fokker 70s almost all of which are owned by the carrier. From operations bases in Brisbane International, Townsville, Cairns, Melbourne Tullamarine, Adelaide International, Perth International, Darwin, and Rockhampton, it offers scheduled flights to 42 towns and cities across Australia as well as New Zealand, although its international routes are currently suspended due to COVID-related border restrictions. It also operates ad-hoc charter services as well as FIFO (Fly-In/Fly-Out) services to mining operations in Australia.
“We expect the E190 to fly predominately regional routes. Given the reduced passengers on mainline routes due to COVID-19, the E190 has the potential to be the perfect aircraft type for some mainline routes," McMillan added.
Australia's only other ERJ operators include Airnorth (Australia) (TL, Darwin) with four ERJ 170-100LRs, Cobham Aviation Services Australia - Regional (Adelaide International) with one ERJ 190-100AR, and Pionair Australia (Sydney Bankstown) which will operate two ERJ 190-300s for Air Kiribati (IK, Tarawa).
