Alliance Aviation Sells 12 GE CF34-10 Engines for USD40.2 Million
Alliance Aviation Services has agreed to sell twelve General Electric CF34-10 engines to Beautech Power Systems for approximately USD40.2 million, aiming to reduce inventory and cut net debt without affecting profit guidance.
- Sale of 12 GE CF34-10 engines to Beautech Power Systems
- Transaction valued at approximately USD40.2 million
- Delivery split between current financial year and early FY26
- Significant reduction in inventory and net debt expected
- No impact on current profit guidance
Strategic Asset Monetisation
Alliance Aviation Services Limited (ASX, AQZ) has announced a significant sale of twelve General Electric CF34-10 engines to Dallas-based Beautech Power Systems for around USD40.2 million (approximately AUD62.3 million). This move forms part of Alliance’s ongoing strategy to optimise its asset base by unlocking surplus inventory value and reducing debt levels.
The engines, removed from six airframes previously sold to Eirtrade, will be delivered from Knock, Ireland, with ten engines scheduled for delivery within the current financial year and the remaining two in early FY26. This staggered delivery aligns with operational and financial planning, ensuring a smooth transition without disrupting Alliance’s service commitments.
Financial Impact and Market Position
Importantly, Alliance has confirmed that this transaction will not affect its current profit guidance, signalling confidence in its underlying business performance. The sale will, however, lead to a substantial reduction in inventory value on the balance sheet and a consequential significant decrease in net debt, strengthening the company’s financial position.
Scott McMillan, Alliance’s Managing Director, highlighted the company’s ability to monetise assets at market-aligned values while benefiting from the favourable AUD/USD exchange rate. He emphasised that most of the engines sold had remaining operational lives exceeding the company’s current needs, making the sale a prudent step in inventory rationalisation.
Strengthening Industry Partnerships
The deal also cements a strategic partnership with Beautech Power Systems, a leading global player in aircraft engine leasing and trading. Beautech’s CEO, Lee Beaumont, praised Alliance’s commercial approach and business model, noting a shared entrepreneurial mindset and commitment to the CF34 engine platform. This relationship could pave the way for future collaborations in engine asset management and leasing solutions.
Alliance’s unique position as Australasia’s leading contract and charter aviation provider, with a wholly owned fleet and strong operational performance, complements Beautech’s global reach and expertise. Together, they appear well placed to navigate the evolving demands of the aviation maintenance and leasing market.
Looking Ahead
While the immediate financial benefits are clear, the transaction also signals Alliance’s disciplined approach to balancing operational capability with financial prudence. The company’s focus on reducing inventory and retiring debt aligns with broader industry trends emphasizing asset efficiency and capital optimisation.
Investors will be watching closely to see how this sale influences Alliance’s balance sheet in upcoming financial reports and whether the strengthened relationship with Beautech leads to further strategic initiatives.
Bottom Line?
Alliance’s engine sale marks a decisive step in asset optimisation, setting the stage for leaner operations and stronger financial health.
Questions in the middle?
- How will the engine sale impact Alliance’s operational capacity in the medium term?
- Could the partnership with Beautech lead to expanded leasing or maintenance collaborations?
- What are the potential effects of currency fluctuations on the final transaction value?
