How Did Alliance Aviation Grow Revenue 19% Despite Profit Challenges?

Financial Performance Amid Operational Challenges

Alliance Aviation Services Limited has released its FY2025 results, showcasing a robust 19% increase in revenue to $760.9 million. However, net profit after tax declined by 5% to $57.3 million, reflecting the impact of severe weather events, industrial action, and aircraft damage that disrupted operations during the year.

Despite these headwinds, the company improved its earnings before interest, depreciation, and amortisation (EBITDA) by 16.2% to $207.3 million, underscoring operational resilience. The Board declared a fully franked final dividend of 3.0 cents per share, signaling confidence in the company’s financial position.

Operational Highlights and Fleet Expansion

Alliance achieved a record 113,621 flight hours, marking the fifth consecutive year of growth in flying activity. The company maintained an industry-leading on-time performance rate of 91%, despite disruptions caused by Cyclone Alfred and widespread flooding in South-east Queensland.

The fleet expanded to 79 aircraft, including 43 Embraer E190 jets and 36 Fokker aircraft, with ten new Embraer E190s settled during the year and another ten scheduled for FY2026. This expansion supports long-term contracts and wet lease operations, notably with Qantas, which now operates 30 Embraer E190 aircraft under wet lease agreements.

Strategic Initiatives and Debt Management

Strategic sales of surplus aircraft and engine inventory bolstered operational reliability by improving spare parts availability, particularly for the Embraer E190 fleet. These sales also contributed to a reduction in net debt from December 2024, although net debt still increased 24% year-on-year to $378.1 million, driven by fleet acquisitions and hangar expansions at Brisbane Airport.

The company refinanced existing debt facilities and secured additional funding, including a loan from the Northern Australia Infrastructure Facility to support a new maintenance hangar in Rockhampton. This infrastructure investment aims to enhance maintenance capabilities and reduce operating costs.

Governance and Sustainability Focus

The Board underwent significant renewal with the retirement of three long-serving directors and the appointment of three new independent non-executive directors. This fresh leadership is tasked with guiding the company through its next growth phase and strategic review, currently underway with external advisers.

Alliance is also advancing its sustainability agenda, preparing to meet mandatory climate-related financial disclosure requirements in FY2026. Initiatives include fuel efficiency improvements, sustainable aviation fuel development, and emissions reporting under the Commonwealth Government Safeguard Mechanism.

Looking Ahead

With the fleet expansion nearing completion, Alliance’s FY2026 outlook is positive. The company expects increased wet lease flying, improved aircraft and crew utilisation, and organic growth in contract flying, particularly in Western Australia and Queensland. Cost discipline and cash flow optimisation remain priorities to support debt reduction and shareholder returns.