Alliance flags all-jet fleet

ALLIANCE Airlines this morning announced plans to dispose of its Fokker turboprop aircraft after a review found an overwhelming preference from customers for jet aircraft on their charter services.

The carrier said the planes had been predominantly used to service the Adelaide to Olympic Dam route on behalf of BHP, but this has now been transitioned to Fokker 100 and Embraer E190 jets following the upgrade of the Olympic Dam runway to accommodate jets.

Alliance will incur a non-cash accounting write-down of $12.1 million as a result of the decision, with a contract agreed today to sell the five turbpoprops along with associated spare engines, parts, tooling and ground support equipment.

“This disposal will allow for substantial fleet rationalisation, crew and engineering redeployment and the conversion of South Australian operations to all jet services,” Alliance said.

After the sale Alliance will be an all-jet operator with 37 Fokker and 20 Embraer E190 aircraft already in service, and a further 13 E190s to be added by Jan 2023.

The move follows Rex Airlines’ approval to purchase Alliance Airline’s major competitor, National Jet Express (NJE) (TD 15 Jul) as part of the divestment of Cobham Aviation Services.

At the time Rex Executive Chairman Lim Kim Hai contrasted the “completely modern” NJE fleet with older aircraft use by “the other major FIFO operators”.

Alliance today said the Fokker 50 non-cash writedown would result in an unaudited statutory loss of $7.1 million for the 12 months to 30 Jun.

The company, which recently saw the sudden departure of its CEO Lee Schofield (TD 28 Jul), is subject to a current takeover bid by Qantas (TD 05 May), with the Australian Competition and Consumer Commission reviewing the deal and expected to hand down its decision next week.