Australia’s Alliance Aviation has signed for 14 Embraer E190s — in a move to “position us for the next phase of growth” — but has stressed that its fleet of Fokker aircraft will remain in service for the foreseeable future.
The deal, valued at $79.4 million, sees Alliance entering into an agreement with US-based lessor Azorra Aviation for the purchase.
Apart from the 14 aircraft, the deal also covers options for a further five E190s, as well as the purchase of six spare GE Aviation CF34 engines, and options for full flight simulators and other related training equipment.
Alliance states that the deal will be funded by proceeds from its share placement and share purchase plan announced in June.
Alliance in June said it was looking to raise around A$122 million ($87 million) in equity capital, for acquiring aircraft to take advantage of growth opportunities.
The first E190 jet will be delivered in September, over a period of eight months, the carrier discloses. While the aircraft will be used predominantly on regional routes, Alliance has not ruled out using it on mainline routes, given a fall in passenger travel demand on such routes in light of the coronavirus outbreak.
Cirium fleets data reveals that Alliance has a fleet of 40 Fokker aircraft in operation, with another eight in storage.
On whether the fleet of E190s will replace the aging Fokker fleet, which are between 24 and 31 years old, Alliance managing director Scott McMillan says: “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.
He adds: “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.”
Alliance discloses that it is not forecasting any material impact on its fiscal 2021 financial results from the acquisition of the E-jets. The first revenue from an E190is expected to be realised only in February 2021, it adds.