Alliance Airlines taps investors to renew fleet

 

ALLIANCE Airlines is tapping investors for up to $122 million to help it expand its fleet by buying aircraft grounded by the pandemic shutdown.

The Brisbane-based company said the COVID-19 pandemic had resulted in airlines around the world grounding aircraft and reducing or ceasing operations in response to travel bans and border restrictions.

Alliance said this provided the carrier with significant opportunities to expand its fleet by purchasing aircraft. Alliance currently has the largest fleet of Fokker aircraft in the world - 40 planes seating 50 to 100 passengers.

Alliance managing director Scott McMillan said the 18-year-old carrier had continued to operate profitably during the shutdown as it focused on contract flying to mining towns and other communities.

Alliance is raising $91.9 million via a fully underwritten institutional placement and up to an additional $30 million via a non-underwritten share purchase plan .

Alliance Airlines boss Scott McMillan with aircraft engineers at Brisbane Airport.
Alliance Airlines boss Scott McMillan with aircraft engineers at Brisbane Airport.

"The capital raising will give us the ability to invest in these initiatives whilst maintaining our strong balance sheet," said Mr McMillan. "Maintaining a strong balance sheet has been the focus of the board for a number of years and is something we will jealously guard."

The money raised will be used predominantly to acquire additional aircraft, and to further strengthen its balance sheet.

Alliance Airlines, founded in 2002 by aviation veterans Steve Padgett and Scott McMillan, has succeeded by focusing on charter flights to mining towns and using one type of aircraft.

The capital raising comes as the competition watchdog threw cold water on moves by Qantas to buy a majority stake in the carrier. The national flag carrier purchased a 19.9 per cent stake in Brisbane-based Alliance last year and announced plans to become its majority owner.

ACCC chairman Rod Sims said last month that the watchdog's current view was that any further increase in Qantas's stake in Alliance was very likely to raise significant competition concerns.

Originally published as Alliance Airlines taps investors to renew fleet



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