Alliance Aviation shares spike on spare parts deal
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More news: Shares in Alliance Aviation Services spiked after it announced the sale of a majority of its Embraer spare parts inventory to Florida-based AVIAN Inventory Management which would relocate the parts to new facilities at Brisbane Airport.
Alliance Aviation’s share price had increased 13.8% to $2.56 at 10:50am.
What they said: “Having this supply of spare parts stored locally will provide great support and improvements to our operational capability, including on-time performance and overall fleet reliability,” Alliance managing director Scott McMillan said.
“Spare parts will also be located in Adelaide, Darwin, Cairns and Townsville to support day-to-day operations for [fly-in-fly-out] and wet lease customers and base maintenance in Rockhampton”.
Alliance Aviation sells $50m of spare parts to Florida-based AVIAN
The news: Alliance Aviation Services has sold the majority of its Embraer E190-E1 spare parts inventory to Florida-based AVIAN Inventory Management for USD32.5 million ($49.59 million).
The numbers: AVIAN will acquire Alliance’s E190 spare part inventory, excluding engines, undercarriages and auxiliary power units. The inventory will be relocated to newly established facilities at Brisbane Airport.
The context: AVIAN holdings of Embraer E190 parts will be among the largest globally, which Alliance says will support its growing E190 fleet and benefit other operators across the Asia-Pacific.
In addition to a $62.5 million sale of engines to Texas-based Beautech earlier this week, Alliance the AVIAN deal is “part of a broader initiative to strengthen the Company’s balance sheet whilst enhancing operational readiness”.
The deals are expected to “materially reduce” Alliance’s inventory levels and enable a significant reduction in net debt. Profit guidance of this financial year remains unchanged following the AVIAN transaction.
The source: ASX
