Covid vax policy and FIFO contracts see Alliance Aviation post record profit

Brisbane’s Alliance Aviation says its on track to vaccinate its entire workforce after being the first in its industry to make Covid jabs compulsory.

Alliance Aviation managing director Scott McMillan at the airline’s Brisbane headquarters. Picture: Lyndon Mechielsen

Brisbane-based airline Alliance Aviation has achieved what other carriers can only dream about in the current pandemic – a record annual profit.

The $48.3m statutory profit before tax coincided with another milestone for the aviation company, which became the first in Australia to make Covid-vaccination compulsory for employees.

The strong result was up 19 per cent on the previous financial year, due to a huge jump in charter flights for everyone from the NRL and Queensland Reds to Australian Open tennis players and FIFO contracts.

Managing director Scott McMillan said the stance on vaccination had been received very well by Alliance’s mining and resource industry clients, many of whom were taking the same approach.

“I believe the mood of the country has changed in the last few weeks. It’s clear vaccination is the only way out of these Covid lockdowns and border closures,” he said.

He said 60 per cent of Alliance’s 820 employees had received at least one jab, with the expectation they would reach more than 80 per cent by late October.

“There’s two or three people who’ve given us fair warning they don’t want to be vaccinated,” Mr McMillan said.

Managing director of Alliance Airlines Scott McMillan with some of his aircraft engineers at their base in Brisbane Airport. Picture: Lyndon Mechielsen

“If it’s a genuine medical or religious reason then we’ll respect that but we’re still going to get to 99 per cent (of employees fully vaccinated).”

There was little to suggest the pandemic had clipped Alliance’s wings however, with the airline taking advantage of falling aircraft prices to add 32 Embraer jets to its fleet of Fokkers.

Of those, up to 18 would service Alliance’s wet lease contract with Qantas and five would bolster the airline’s FIFO contracts, putting the company on track to triple its total flying hours by the end of the 2022 financial year.

Mr McMillan said it was very satisfying to see the work of the last 20-years coming to fruition.

An Alliance Aviation Embraer 190 lands at Brisbane airport. Picture: Lyndon Mechielsen

“When we started post-September 11, people said it was the worst time ever to start an aviation company,” he said.

“But we got through the GFC, the so-called mining downturn and now Covid. Our business model is very, very resilient and very, very adaptive.”

Shareholders were sharing in the success, with Alliance’s share price climbing an extraordinary 170 per cent since February 2020.

However the board took the decision not to pay a final dividend for 2021, but to retain the capital to aid in the expansion program.

Performance incentives for management were also wiped, as a result of the airline’s on-time performance falling by 2 per cent.

“It’s not a very big miss but we pride ourselves on 95 per cent and 93 per cent is not good enough,” said Mr McMillan.

“We had a bad run of engineering issues and crewing issues but we’re through that and it’s already on the way back to 95 per cent.”

Alliance’s strong financial performance in 2021 was in contrast to that of Regional Express which also embarked on a fleet expansion in the last 12-months, adding six Boeing 737s.

Rex was expected to post a loss of $18 million for 2021, after a $9.9 million profit in the first half of the financial year.

Qantas was also on track for another huge loss after a full 12-months without international flights, and heavy disruption to the airline’s domestic operations.