Tag Archives: Fokker

Qantas looks to acquire Australian FIFO airline Alliance Aviation Services

Mining mergers and acquisitions, Mining services, , , ,

Qantas says it has reached an agreement to fully acquire Australia-based operator, Alliance Aviation Services Ltd, enabling the national carrier to better serve the growing resources sector with fly-in fly-out options.

The agreement, which is subject to a vote from Alliance shareholders and competition clearance, would see Alliance become a wholly-owned part of the Qantas Group.

There is no change to Qantas’ arrangements with Alliance as a result of today’s announcement given the approvals required, which would take a minimum of several months to secure, the company said.

Alliance has a fleet of 70 jet aircraft that seat up to 100 people each, making them well suited to charter operations. Between these charter services and a small number of passenger routes that overlap with large mine sites, Alliance accounts for around 2% of the total domestic market.

The national carrier is Alliance’s biggest single customer, with a long-term agreement that sees Alliance operate up to 18 newly acquired E190 jets for QantasLink. This arrangement has helped open new direct routes and increase frequency across regional Australia, Qantas says.

Qantas bought just under 20% of Alliance in February 2019 and, at the time, flagged its long-term interest in acquiring 100% of the airline. The ACCC investigated that minority holding for three years and made no findings that it lessened competition.

Under the agreement announced today, the remaining 80% would be acquired through a scheme of arrangement where Alliance shareholders receive Qantas shares worth A$4.75 ($3.44) for each Alliance share they hold, representing a 32% premium to Alliance’s volume weighted average price for the past three months. Qantas would issue new shares valued at approximately A$614 million in a transaction that is expected to be earnings per share accretive for Qantas shareholders, before synergies.

Qantas Group CEO, Alan Joyce, said acquiring the remaining shares in Alliance would mean QantasLink can better compete in the highly competitive charter segment, particularly given the shared fleet type of Fokker aircraft.

“Alliance’s fleet of Fokker aircraft are perfect for efficiently serving resources customers in Western Australia and Queensland,” he said. “They also have a big inventory of spare parts that would significantly extend the practical life of a combined fleet of around almost 70 Fokkers.

“Keeping these aircraft operating reliably for longer than either carrier could achieve by themselves will help keep costs down, which is ultimately good news for charter customers. There are also benefits from bringing together our operations planning and training facilities.”

He added: “The resources sector continues to grow and any new tender for airline services will be very competitive. It makes a lot of sense for us to combine with Alliance to improve the services we can offer, which is a positive for both airlines as well as the travelling public.”

Just some of the mine sites that Alliance Aviation serves include BHP’s Western Australia Iron Ore operations, St Barbara’s Leonora mine in Western Australia, Incitec Pivot’s Phosphate Hill operation in Queensland and the BHP Nickel West operations in Western Australia.

Australia fly-in fly-out specialist bolsters aircraft fleet

Mining services, , , , , , , ,

Alliance Aviation Services says it has entered into a binding purchase agreement with Swiss airline, Helvetic Airways AG, for the purchase of five Fokker 100 aircraft and the entirety of Helvetic’s spare engines, parts and tooling offering.

This acquisition continues to build on the strategic rationale of Alliance’s purchase of 21 Fokker aircraft from Austrian Airlines, in December 2015, the company says, enhancing the company’s ability to expand its fleet as more opportunities present themselves in Australia and the South Pacific. This is particularly so in contract aviation and wet lease services, the company said.

Alliance has several aviation contracts in place with mining companies with operations in remote parts of Australia that have a fly-in fly-out service for their employees.

The rationale for the deal, according to Alliance, includes boosting the economic life of Alliance’s fleet and reducing future capital expenditure requirements by securing low cost major components; reinforcing Alliance’s position as the largest supplier of engines and spare parts outside of Fokker; and further diversifying Alliance’s revenue streams.

Scott McMillan, Managing Director for Alliance Airlines, said: “Since the 2015 fleet purchase, we have increased our operational fleet by 11 aircraft to meet the needs of a resurgent resources sector, satisfy the demand for wet-lease services and service the growing opportunities within the tourism sector. We have also successfully on-sold several of the Austrian fleet as well establishing ongoing engine leases and we continue to sell increasing amounts of spare parts to all the major Fokker operators in the southern hemisphere.”