Charter operator Alliance Aviation recorded a three-fold jump in its half-year profit, helped by a sharp rise in contracted wet-lease activities. 

For the six months to 31 December 2023, the company posted a statutory pre-tax profit of A$37.7million ($24.5 million), significantly higher than the A$9.5 million in the year-ago period. 

Alliance Airlines E-190 Embraer

Source: Alliance Airlines

Contracted wet-lease activities helped drive half-year profits higher at Alliance

Operating revenue for the half-year rose 27% to A$299 million, led by “significant growth” in wet-lease revenue, which doubled year on year, offsetting a decline seen in its aviation services business. 

Its major customer is national carrier Qantas, which has a contract to wet lease up to 30 Embraer 190s for domestic and short-haul operations. Qantas also has options to take another three E190s by end-June, with one more in July. 

Alliance managing director Scott McMillan highlights the performance of its charter unit: “Contract charter provides the foundation for fleet expansion activities, with increased activity in the half year. Our market leading on-time performance, coupled with our ability to react quickly to capacity demands, is our competitive advantage.” 

Still, Alliance warns that its operating expenses “continue to be impacted” by inflation, supply chain woes, and other economic challenges. 

Alliance adds: “The group continues to focus on managing these challenges as they arise however some recent contract negotiations have resulted in increases to the cost base and passed through where contracts allow.” 

The operator adds that it expects to continue deploying capacity on charter and wet-lease operations, with deliveries of another seven E190s to run through June. 

Says McMillan: “Our strategy to acquire additional fleet units in advance of immediate operational requirements has proven to be successful. We know that there is incredible demand in Australia for jet aircraft [with under 100 seats].”