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Alliance has sold off most of its spare parts for the Embraer E190, as well as 12 surplus engines.
The FIFO and charter operator has offloaded the bulk of its E190 parts inventory to Orlando-based supplier AVIAN Inventory Management for around $49.4 million, and has sold the CF34-10 engines from six E190 airframes to Dallas firm Beautech Power Systems for $62.3 million.
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As part of the spares purchase, AVIAN will buy Alliance’s current E190 inventory other than engines, undercarriages, and auxiliary power units, and relocate them to new facilities at Brisbane Airport.
According to Alliance’s managing director, Scott McMillan, the AVIAN deal will “materially increase the spare parts holdings in Australia for our growing E190 fleet of aircraft and for other operators”.
“AVIAN is a well-respected supplier with whom we have had supply dealings in the past. AVIAN hold the most significant Embraer inventory of any provider globally and Alliance will now have access to that here in Australia,” he 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.
“Spare parts will also be located in Adelaide, Darwin, Cairns and Townsville to support day-to-day operations for FIFO and wet lease customers and base maintenance in Rockhampton.
“This strategic partnership puts Alliance in an industry leading position to support its expanding E190 operations with increased efficiency, improved fleet reliability, and strengthened service delivery for its diverse customer base.”
Ian Gurekian, AVIAN Inventory Management’s CEO, said the company is proud to have been selected by Alliance to “provide a capital solution and manage their aircraft parts and component portfolio needs”.
“Alliance is AVIAN’s first direct airline customer, and this partnership is testament to how our platform’s innovative, customised solutions can be equally applied to airlines, OEMs, suppliers and MROs to release value trapped in valuable aerospace inventory, optimise distribution, and re-direct capital to growth efforts,” he said.
“We thank Alliance for the trust they have placed in AVIAN and are very excited to install our proven platform in Brisbane and serve Alliance as well as the entire APAC region from that location.”
Regarding the Beautech deal, McMillan said: “We are delighted with this outcome where we have again, been able to monetise inventory at values commensurate with current market prices and take advantage of the low AUD/USD exchange rate.
“Our Aviation Services business has and will continue to make a significant contribution to the financial performance of the Company. Most of the engines sold have remaining lives that are surplus to the Company’s current requirements.
“This transaction is consistent with our Company objectives of reducing overall inventory levels, unlocking surplus value and retiring debt.
“We are also delighted to have formed a strong relationship with Beautech, a leading trader and lessor of aircraft engines who are well situated in the General Electric CF34-10 market.”
Alliance is Australia’s largest E190 operator, with 43 in its fleet and firm purchase commitments for a further 10 stretching into next year.
