Alliance Airlines MD Exits Early Amid Profit Downgrade

By Andrew Curran.

The founding managing director of Alliance Aviation Services Limited, trading as Alliance Airlines, has brought forward his resignation date. The airline’s chief financial officer has also announced his intention to step down. The announcement coincides with a profit downgrade for the airline.

Managing Director Scott McMillan will wrap up his tenure today, November 7, 2025, rather than at the end of the month, as previously announced. Chief Financial Officer Andrew Evans is also resigning.

A November 7 Australian Stock Exchange filing conveyed the news. It follows a seven-day suspension of trading. That suspension is now lifted. As that happened, in a separate filing, Alliance warned that its financial results for the current fiscal year, ending on June 30, 2026, will be “materially lower than analyst consensus estimates.”

Today's update forecasts that the before tax profit for the year will be between AUD46 – 50 million (USD30 – 32.4 million). This compares unfavourably to the 12 months to June 31, 2025, when the airline recorded a before tax profit of AUD82.1 million (USD53.2 million).

Alliance Airlines profit downgrade due to various factors

Alliance Airlines attributes the profit downgrade to various factors. It says aircraft and engines are costing more, which, combined with them flying shorter sectors and incurring higher than budgeted capitalised base maintenance requirements, have resulted in an AUD15 million (USD9.7 million) increase in depreciation charges this year.

The airline also says repairs, maintenance, compliance and logistics costs have cost around AUD1 million (USD650,000) more than budgeted each month. Alliance says this reflects supply chain price inflation and inefficiencies. But it is costing the airline an unexpected AUD12 million (USD7.77 million) this financial year.

Additionally, the airline is locked in an AUD4.2 million (USD2.7 million) contract dispute with a major customer.

As of June 30, 2025, Alliance Airlines was operating 79 aircraft, including 36 Fokker jets and 43 Embraer jets. It generated 41% of its annual revenue in last financial year from charters, including fly-in-fly-out charters for mining and resource companies, with the majority of those customers drawn from the gold, iron, copper and uranium sectors.

Finally, the filing says the anticipated AVIAN inventory management agreement was implemented earlier than expected, resulting in an unexpected AUD3.5 million (USD2.3 million) cost in the first quarter of the financial year.

Alliance remains in good shape despite downgrade

Notwithstanding the profit downgrade, Alliance Airlines says its balance sheet remains strong, it continues to trade profitably, and its operating cash flow is in good shape.

However, the company is bringing external advisors on board to look at how the airline manages its depreciation charges. It is also initiating a cost reduction programme targeting the purchasing and logistics process. Additionally, the airline will review its wet-lease arrangements and business model and proceed with the planned sale of non-core assets. Another external advisor is going to review the Alliance’s entire property portfolio.

Meanwhile, the first filing notes that Evans took on the CFO role with a “short term tenure” in mind and his resignation is “unrelated to recent events or the company’s outlook.”

The airline expects to appoint a new CFO by March 2026 and says Evans will remain involved with Alliance to allow a smooth handover.

No reason was given for McMillan’s accelerated departure. He will be replaced by Stewart Tully, currently the other joint managing director. McMillan was one of Alliance’s founders and was instrumental in its growth over the past two decades.

As well as stepping down as joint managing director, McMillan is stepping down from Alliance’s board, effective immediately.

Chairman James Jackson acknowledged McMillan’s contribution in today’s filing.

McMillan will continue to “support the business” over a six-month transition period, acting as a consultant as required.

Photo: Aero South Pacific.