Alliance Aviation Services Limited
(ASX: AQZ)Share Price and News
About Alliance Aviation Services
Alliance Aviation Services is a provider of aviation services. The company's operations include fly-in fly-out (FIFO) services for the mining and energy sectors, ad-hoc charter flights, and aircraft wet and dry leasing.
Alliance operates a diverse fleet, including Fokker 70, Fokker 100, and Embraer E190 aircraft, servicing over 46 destinations. A significant aspect of Alliance's business model is its strategic partnerships, notably with Qantas, which holds a 20% stake in the company. Through wet lease agreements, Alliance operates Embraer E190 jets under the QantasLink brand, enhancing its revenue streams and market presence.
Alliance Aviation's Company History
Alliance Aviation Services began operations by acquiring the assets of the defunct Flight West Airlines in 2002. Starting with two Fokker 100 aircraft, the company focused on providing reliable FIFO services to Australia's resource sector. Over the years, Alliance expanded its fleet and service offerings, including acquiring additional Fokker aircraft from EU-based Austrian Airlines in 2015. In 2019, Qantas acquired a 19.9% stake in Alliance, strengthening its collaborative ventures.
2020 saw an unexpected boom in demand. The pandemic shutdowns meant commercial flights were limited and certain companies like mining companies and sport teams needed Alliance's services.
The company further expanded its fleet by purchasing 30 Embraer E190 jets between 2020 and 2023. The total fleet size is projected to reach 90 aircraft, including 52 E190s, by 2026, enhancing capacity and efficiency.
That era also saw attempts by Qantas to buy out the company completely, but this was blocked by the Australian Competition & Consumer Commission in 2023. Alliance continues to thrive independently, focusing on strategic growth and operational excellence.
Future Outlook of Alliance Aviation Services (ASX: AQZ)
Alliance Aviation Services has outlined a confident forecast for FY25, underpinned by strong operational performance and ambitious fleet growth. Based on first-half results, with EBITDA of A$101.2m, full-year forecasts suggest a target approaching AU$205-210m but for a profit of $80-85m. The latter is down from $92.9m and it is due to Cyclone Alfred (which led to Brisbane Airport being closed for 4 days), aircraft damage and industrial action.
This guidance is driven largely by an increase in contracted flight hours and ongoing improvements in fleet utilisation, particularly with the Embraer E190 aircraft, which now form the backbone of its operations. The strategic decision to acquire an additional 30 E190S from Aercap, announced in early 2023, further signals the company’s intent to meet growing demand from FIFO clients, regional routes, and wet lease contracts.
A critical pillar in AQZ’s outlook is its continuing wet lease arrangement with QantasLink. Despite the blocked acquisition, Qantas remains a 19.9% shareholder, and the two companies maintain a strong commercial relationship. Wet lease contracts with Qantas provide steady, long-term revenue and reduce volatility in Alliance’s earnings, a valuable asset amid uncertain macroeconomic conditions and fluctuating travel demand. The risk is that the contract may be reviewed as Qantas' fleet renewal project continues. It may be a few years before Qantas reconsiders its partnership, but shareholders ought to bear this in mind.
On the macro front, Australia's resource sector continues to thrive, with new exploration and mining developments creating sustained demand for FIFO aviation. The aviation charter market is also experiencing a post-COVID recovery in demand, particularly for tailored, reliable regional transport options.
Alliance, with its low-cost structure and niche focus, is well placed to benefit from this trend. However, risks remain. Inflationary pressures, aircraft maintenance costs, and pilot shortages could impact margins. Regulatory scrutiny, as seen in the Qantas takeover block, may also limit strategic options.
Nonetheless, Alliance’s asset-heavy balance sheet, long-term contracts, and fleet modernisation plans provide strong foundations for sustained growth over the next 3–5 years.
It is seeking to reduce its net debt from $425-430m to $315-360m during FY26, which will be funded by maximising operating cash flow, consolidisation and potential monetisation of infrastructure assets, and focus on cost and capital expenditure efficiencies. The company has not paid dividends for a while, but has indicated it may recommence once this is done.
Is Alliance Aviation a Good Stock to Buy?
Alliance Aviation Services (ASX: AQZ) offers an interesting proposition for investors. The dark days of the pandemic where it was the only airline flying are long gone.
Things are far from terrible. The company has a focused operating model, dependable recurring revenue via long-term FIFO contracts, and additional upside through its wet lease agreements with Qantas.These attributes give it a more stable earnings base than many traditional carriers.
But it does not pay dividends, and it is unknown when it will recommence, and its fate is intertwined with what Qantas does with its deals, not to mention where the commodities cycle goes.
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Frequently Asked Questions
As of June 2025, Alliance Aviation Services does not pay a dividend. The company has focused on reinvesting profits to fund fleet expansion and operational growth.