Alliance Aviation hails ‘best year ever’ and promises there is even better to come at AGM

Just like Rex, Alliance Aviation saw the opportunity to expand its fleet during the Covid pandemic but while one airline failed spectacularly, the other soared to new heights.

Alliance Airlines managing director Scott McMillan. The Brisbane-based company is forecasting another record result in 2025. Picture: Lyndon Mechielsen

Alliance Aviation has forecast another record profit for the 2025 financial year as the Brisbane-based airline continues to soar in stark contrast to the failures of Rex and Bonza.

Speaking at the company’s AGM on Thursday, chairman Steve Padgett highlighted a series of records achieved by Alliance in the year to June 30, including a record profit before tax of $86.3m, record total flight hours, a record fleet with 72 aircraft in service, and record staff count of 1413.

Mr Padgett compared the airline’s position to that of when he and managing director Scott McMillan first launched Alliance in 2002 with two leased Fokker 100s and 72 part-time employees.

Announcing his intention to retire from the board during 2025, Mr Padgett thanked shareholders for “allowing him to be part of what is now a very large and successful business”.

“It has been a privilege to serve as your chairman,” said Mr Padgett, whose services to aviation were recognised with an Order of Australia medal in 2019.

Mr McMillan told the meeting Alliance was on track to achieve another record profit in 2025 of $92.9m after the most successful year in their history.

Like Rex, Alliance saw the opportunity to expand its fleet during the pandemic but the end result could not have been more different.

Alliance Airline chairman Steve Padgett has announced his plans to retire from the board next year. Picture: John McCutcheon

Whereas Rex chose to put its newly acquired 737 jets on major city routes in competition with Qantas and Virgin Australia, Alliance wet-leased many of its 100-seat Embraer jets to QantasLink and used some to meet growing demand for fly-in, fly-out services.

Mr McMillan noted that Alliance had “never been in a better position with its contract book” due its ability to operate safe, on-time and reliable air services.

Another 16 Embraers were still to be delivered, with their arrival over the next 20 months to allow for further expansion.

“Additional aircraft in the fleet will allow Alliance to commit to capacity requests, provide for redundancy in the network and increase the activity in ad hoc charter services,” Mr McMillan said.

He acknowledged the challenges facing their suppliers left out of pocket by the Rex and Bonza collapses, and promised to support those businesses in any way they could.

“These are small businesses that might only turn over a few hundred thousand dollars a year, and have had $20,000 bad debts from Rex or Bonza,” he said.

“We’ve made a point of looking after them by paying them early, that sort of stuff, because they’re important suppliers to us and we value our long-term and mutually beneficial relationships.”

The AGM briefly touched on the decision by Qantas not to push ahead with a planned $614m takeover of Alliance, after the Australian Competition and Consumer Commission objected.

Although it had been expected that Qantas with Alan Joyce at the helm would take the competition watchdog to court, a change of CEO saw a change of heart.

Mr Padgett said it was “not the outcome they had anticipated” but it was not holding them back.

“Alliance has continued to grow and expand with Qantas remaining a significant shareholder and a key customer,” he said.

All resolutions put to shareholders received overwhelming support including the election of two new directors – chartered accountant Mark Stanton and former investment banker James Jackson.

The men replaced Peter Housden and David Crombie, who retired from the board after 13 years of service.

No firm date had been set for Mr Padgett’s retirement other than “some time in 2025” and before the next AGM.

Alliance shares closed down 3.3 per cent on Thursday at $2.86, well down from the $3.65 they were trading at in April last year before the ACCC opposed the Qantas takeover. Qantas shares closed down 1c at $6.97 on Wednesday.

Originally published as Alliance Aviation hails ‘best year ever’ and promises there is even better to come at AGM