Red ink as Alliance Airlines posts $105mn half year loss

By Andrew Curran.

Alliance Airlines has reported a statutory after-tax net loss of AUD105.8 million (USD75 million) for the six months to December 31, 2025. In a February 20, 2026, Australian Stock Exchange filing, the specialist charter airline described the second half of last year as “challenging.”

The filing said a nine-figure impairment of its Fokker fleet, an inventory write-down, and a commercially unviable arrangement with a big wet-lease customer were behind the less than stellar result.

Stripping out these one-time, non-operational costs, Alliance Airlines squeaked out an after-tax net profit of AUD11.9 million (USD8.4 million). However, this figure is 59% down on the comparable 2024 period. The after-tax net profit result also compares unfavourably to the AUD28.8 million (USD20.4 million) after-tax net profit reported for the first half of calendar 2025.

Alliance posted revenues of AUD368.8 million (USD260.4 million) for the second half of 2025, an increase on the AUD338.9 million (USD239.3 million) reported for the first six months of 2025. 

Alliance’s 81 aircraft also operated a record 59,207 flying hours across the six months to December 31, 2025.

Unviable wet-lease contract impacts profit

In addition to its wet-lease business, Alliance Airlines is a major closed charter operator in the fly-in-fly-out market, servicing mining and resources customers. It also operates ad hoc charters, a modest regular passenger transport network, and historically has had a substantial spare parts business.

Alliance did not say who the loss-making wet lease arrangement was with, but its biggest wet-lease customer (and 19.9% shareholder) is Qantas. Alliance Airlines operates thirty E190-100s for Qantas. All Alliance said about its problematic client was that it operates “critical regional transport infrastructure supporting rural, resources, and tourism industries, which is necessary to the customer’s current network.”

Alliance Airlines also has on-going wet-lease arrangements in place with Virgin Australia and Airnorth. It said it is engaged in a “good faith commercial negotiation with the customer” but alternative options were being explored if no deal is reached.

Substantial one-off and non-operational costs

Aside from the “commercially unviable” wet-lease arrangement, one-off and non-operational costs put the squeeze on Alliance's profit.

Increased revenues were offset by a AUD144.6 million (USD102.1 million) impairment on F70 and F100 aircraft and engines. Alliance has 35 Fokkers in its fleet, including twelve F70s and twenty-three F100s. The impairment followed a review of the company’s fleet late last year.

“As Alliance’s fleet of F70 and F100 aircraft is approaching the end of its useful economic life, the company is working through a detailed long-term plan to manage the progressive retirement of these aircraft,” reads a February 12 stock exchange filing. “As part of this plan, the company will consider lease and purchase options, as well as the redeployment of the aircraft.”

Alliance’s time frame for this is four to five years.

The company posted an AUD7.2 million (USD5.1 million) impairment on right of use assets, an AUD100,000 (USD70,600) impairment of intangible assets, and an AUD12.9 million (USD9.11 million) write-down on Fokker spare parts and inventory.

“The board and management are aligned on the imperative to improve financial performance and strengthen the financial performance of the group,” says Tully. “Our immediate priority is the disciplined execution of the operational turnaround plan to improve capital allocation, profitability, and cash flow generation, and strengthen the balance sheet.”

“The includes and organisation wide review of our cost base and expense management to align with the current operating context.”

Tully replaced long-time Alliance Airlines MD Scott McMillan, who stepped down late last year after a profit downgrade and a serious of minor snafus at the carrier.

You can read Alliance Airlines’ half yearly result filings here.

Photo: Aero South Pacific.

Contact the writer: andrew@aerosouthpacific.com