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Alliance Airlines is preparing to ramp down FIFO flights for BHP Nickel West as the mining company’s operations transition to “care and maintenance”.
The airline currently operates 24 round trips per week from Perth to Mt Keith and Perth to Leinster on behalf of BHP Nickel West, effectively occupying two of its Fokker 100 aircraft full-time. The miner is planning to move from full production to care and maintenance by December.
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According to Alliance, the BHP Nickel West contract accounts for around 3,140 flying hours per annum in aggregate.
“During FY24 those hours represented three per cent of total company flight hours and with the growth in other areas of the business forecast for FY25 hours would have fallen to 2.5 per cent of total flying hours,” the airline told the ASX.
“Alliance anticipates that the number of flights will reduce over time, to a level sufficient for the care and maintenance staff to be rotated in the normal fashion.”
Alliance estimates a full-year EBITDA impact for the 2026 financial year of around $5 million from the reduction in BHP Nickel West services.
“Given the service reductions are anticipated to commence in October this year the impact for FY25 will be approximately $3-4million at the EBITDA level,” the airline said.
“However, given the nature of the company’s operation, the surplus capacity will be reallocated to existing and new customers in Western Australia and Queensland, so at this time, this situation will have a minimal net impact on the company’s earnings going forward.
“In the meantime, Alliance will work with BHP Nickel West in a flexible and supportive manner as would be expected from the long-term relationship both companies have enjoyed since 2006.”
Alliance earlier this year predicted pre-tax profits for 2023–24 will exceed the consensus forecast of $83.9 million, with full-year results to be released after the close of trade on 14 August.
“This will be an uplift in profit before tax of in excess of 60 per cent over FY23,” the airline told the ASX.
The FIFO and charter operator in May renewed contracts with two other large mining companies.
Coal miner Glencore and gold miner Newmont signed on for contract extensions of three and five years respectively for Alliance’s FIFO operations, which serve Glencore’s mine at Emerald, Queensland, and Newmont’s mine at Tanami in the Northern Territory.
