Alliance Aviation is seeking to raise up to $121.9 million to buy more jet aircraft to service additional charter customers amid the coronavirus pandemic.
“While other airlines are concerned with solvency and a myriad of other issues, our company is in a unique position to look for opportunities,” chairman Steve Padgett told shareholders on Thursday.
Alliance said on Thursday it had been approached by a number of potential clients about adding contract flights including resource sector companies, domestic tourism operators, tourism boards and regional councils.
“While these new customers are currently engaged on short term contracts, Alliance’s management team is focused on securing these customers over the longer term, which presents an opportunity for Alliance to grow its market share of the aviation sector,” the company said.
Alliance is seeking to raise $91.9 million through an institutional placement at $2.95 a share, a five per cent discount from Wednesday’s closing price of $3.10, plus a $30 million share purchase plan.
The institutional placement is fully underwritten by Ord Minnet and presents 24.4 per cent of Alliance’s existing issued share capital.
Alliance currently has a fleet of 40 Fokker 100 and 80-seat jets, plus five Fokker 50-seat turboprops, none of which are still in production.
The company indicated it would try to acquire second-hand Fokker jets but might be forced to purchase a different type of aircraft, which would result in more training costs for its pilots, crew and maintenance staff.
Alliance said it was also well-positioned to operate regional air services for other Australian carriers, an arrangement known as wet leasing.
Alliance had done so for Virgin Australia although that has stopped with the carrier entering voluntary administration, with those aircraft diverted to serving resource sector clients.
The company expects to report a $40 million profit before tax in FY20, up from $32.8 million in FY19.
It said that last fiscal year a quarter of its $277.1 million in revenue came from a single client – BHP.