Alliance Airlines Sells Aircraft and Engines to Boost Finances

Alliance Aviation Services Limited, operating as Alliance Airlines (QQ) and based in Brisbane International, has announced the sale of six Embraer E190 airframes and thirteen Rolls-Royce engine cores. This strategic move aims to monetize surplus inventory and enhance the company’s financial stability, according to a filing with the Australian Stock Exchange on November 28.

Strategic Asset Sales to Strengthen Financial Position
In a significant development, Alliance Airlines has finalized contracts to sell six E190 airframes to Scissortail Aviation LLC, a US-based company, and Bellinger Asset Management Pty Ltd, based in Sydney. Additionally, thirteen Rolls-Royce Tay 620 and 650 engine cores have been contracted for sale to Curaçao-based Airline Technical Support Caribe B.V. These transactions are part of Alliance’s broader strategy to optimize its asset portfolio and improve cash flow.

Details of the Airframe Transactions
The six E190 airframes being sold originate from a larger batch of 30 aircraft that Alliance purchased from AerCap in early 2023. Of these, four airframes are already owned by Alliance, while the remaining two are scheduled to be settled in the first quarter of 2025. Deliveries to Scissortail Aviation and Bellinger Asset Management will commence next month and are expected to be completed by the end of February.

By selling these airframes, Alliance Airlines is effectively reducing its surplus inventory, allowing the company to focus on its core fleet operations. The E190 airframes are a crucial part of Alliance’s fleet, which currently includes thirty-five E190-100s, twenty-five F100s, and thirteen F70s. Additionally, the company has another twenty-five E190s slated for delivery through various purchase agreements established in recent years.

Engine Core Sales Enhance Cash Flow
Alongside the airframe sales, Alliance Airlines is also selling thirteen Rolls-Royce Tay 620 and 650 engine cores. These engines are either surplus, time-expired, or deemed unserviceable. The F70 and F100 fleets operated by Alliance utilize these specific engine types, making the sale a strategic decision to manage and optimize the company’s engine inventory.

The engine deliveries to Airline Technical Support Caribe B.V. have already begun and are set to be finalized by the end of February. By retaining ownership of the engines, undercarriages, and auxiliary power units, Alliance Airlines ensures that these components are either stored in Europe for future remarketing or retained for internal use, maintaining flexibility in asset management.

Financial Impact and Future Outlook
The asset sales are projected to generate a cash and capital expenditure avoidance benefit of AUD20-23 million (USD13-15 million) in the first half of 2025. This financial boost is expected to support Alliance Airlines in managing its operational costs and investing in future growth initiatives.

Chairman Hsieh Su-Chien emphasized that these transactions are part of a broader effort to streamline operations and enhance financial resilience. By converting surplus assets into liquid capital, Alliance Airlines can better navigate market fluctuations and invest in strategic areas that drive long-term growth.

Fleet Optimization and Market Position
According to ch-aviation’s fleet data, Alliance Airlines operates a diverse fleet comprising thirty-five E190-100s, twenty-five F100s, and thirteen F70s, with an additional twenty-five E190s pending delivery. This fleet composition positions Alliance Airlines as a versatile player in the regional aviation market, capable of catering to various route demands and operational requirements.

The sale of excess airframes and engines not only strengthens the company’s financial position but also allows for a more focused and efficient fleet management strategy. By optimizing its asset base, Alliance Airlines can ensure higher utilization rates for its remaining aircraft and engines, thereby improving overall operational efficiency.

Alliance Airlines’ decision to sell six E190 airframes and thirteen Rolls-Royce engine cores marks a pivotal step in the company’s ongoing efforts to enhance financial stability and operational efficiency. These asset sales are expected to provide significant cash flow benefits, enabling Alliance Airlines to invest in strategic growth areas and maintain a competitive edge in the regional aviation market.

As Alliance Airlines continues to optimize its fleet and manage its assets effectively, stakeholders can expect a more robust and financially resilient company poised for sustained success in the dynamic aviation industry.

Related News : https://airguide.info/?s=Alliance+Airlines

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com