Alliance Aviation Services Ltd (ASX: AQZ) will fly from Brisbane to Proserpine four times a week. The Queensland state government announced the deal in an effort to revive tourism in the area. There is also the option to increase daily flights if warranted by demand.
QLD Premier, Annastacia Palaszczuk said: “Tourism supports one in three jobs in the Whitsundays. We know how crucial this industry is to the livelihoods of people in this region.”
These flights can be booked from today and will begin on 22 June.
Whitsunday Coast Airport COO, Craig Turner said, “These flights present the opportunity for WCA to develop a partnership with Alliance Airlines through this challenging period and beyond.”
Alliance Airlines, the nation’s workhorse
The move further cements Alliance Airlines as a reliable travel partner. The company’s core offering is fly-in-fly-out services for resource projects across the country. These flights increased during the coronavirus pandemic to maintain social distancing.
The swift and agile approach from the company allowed them to not only increase flights but to also win new resource clients during the pandemic. On 20 March the company also reported a large increase in charter revenue, driven by both social distancing and the lack of operating alternatives.
The company is one of the unsung heroes of the COVID-19 period through its support of resource projects. In a recent market update, Alliance provided guidance of a likely $40 million dollar profit.
This is in stark contrast to small airline competitor, Regional Express Holdings Ltd (ASX: REX) who entered the pandemic demanding money from state governments of Western Australia and Queensland.
Year-to-date performance
With a share price that is up by 8.7% year-to-date, Alliance Airlines has outperformed the aviation sector. It has a price-to-earnings ratio (P/E) that is 4 points higher than its 8-year average. In 2019, Qantas Airways Limited (ASX: QAN) took a 19.9% interest in Alliance, make it the airlines largest shareholder.
This acquisition is currently under investigation by the ACCC. They have raised issues about purchasing such a large stake in an “important and growing competitor”. I agree fully with this as the airline’s strength has come from its independence and agility.
Foolish takeaway
Alliance Airlines is continuing to win both work and favour across the country, it has been a rock-solid partner for the resources sector throughout the pandemic. I believe its ability to deliver continued service has set up this organisation for sustained incremental performance.
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More reading
- Is the Qantas share price a buy?
- Why Afterpay, Infigen, Qantas, & Zip Co shares are charging higher
- ASX 200 up 0.6%: NAB charges higher, ACCC investigates Qantas acquisition
- Why the price of these ASX travel shares soared over 30% since mid-May
- Qantas share price lower on ACCC investigation
Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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