Two days out from releasing its annual financial results, Alliance Airlines has confirmed the sale of five Adelaide-based Fokker 50 turboprops and the resignation of longstanding Chief Executive Officer Lee Schofield. The unrelated events continue a busy year at the fly-in-fly-out (FIFO) and charter airline and mark the end of Alliance’s days as a turboprop operator.
Alliance Airlines becomes an all jet-operator
The sale includes associated spare engines, parts, tooling, and ground support equipment. The five planes are VH-FKO, VH-FKV, VH-FKW, VH-FKX, and VH-FKZ. The five Fokkers range in age from over 27 years to over 33 years. The Dutch-made Fokkers have proved remarkably suited to Australian FIFO and charter operations and made up the entirety of the airline’s fleet until the recent arrival of Embraer jets.
Alliance Airlines is the world’s biggest operator of Fokker aircraft. Besides the Fokker 50s, the airline flies 25 Fokker 100, 14 Fokker 70 jets, and 20 Embraer E190 jets from its various bases in Australia. Alliance Airlines also has the world’s largest holding of Fokker parts and spares.
The Brisbane-based airline sold the five Fokkers for AU$4.6 million to an undisclosed customer. The sale will result in a non-cash accounting write-down of AU$12.1 million, which has been recognized in the 2022 financial year. But the sale will result in ongoing annual cost savings related to fleet rationalization, crew and engineering redeployment, and the conversion of Alliance’s Adelaide base to an all-jet operation. The annual saving is estimated to be AU$4.4 million.
The runway upgrade at Olympic Dam Airport (OLP) has rendered the Fokker F50s surplus to requirements. Photo: NRW Civil Mining
Customers want jet flights over turboprop services
The distinctive Fokker turboprops are a common sight at Adelaide Airport (ADL) and primarily flew between Adelaide and Olympic Dam (OLP) to service BHP’s copper and uranium mining operations there. But OLP’s runway was recently upgraded to handle jets. BHP and the FIFO workers have stated a preference for the Fokker and Embraer jets, rendering the Fokker turboprops surplus to requirements.
“The company has concluded a review on the Fokker 50 fleet, which included using the turboprop aircraft for existing and potential customers. Overwhelmingly, the preference of these customers was for jet aircraft on their charter services,” says Alliance Airlines in Monday’s stock market filing.
“Moreover, the alternative shorter routes with lower passenger requirements were deemed non-core to the Alliance business. It was therefore concluded that the turboprop fleet is to be retired early and subsequently sold.”
Alliance Airlines says they’ll collect the $4.6 million from the sale this quarter. The airline also adds they expect their remaining Fokker jets to fly for another decade.
Alliance Airlines says it will keep flying its remaining 37 Fokker aircraft for another decade. Photo: Alliance Airlines
Alliance Airlines CEO resigns
Meanwhile, in a separate market update, Alliance Airlines confirmed its longstanding and well-regarded CEO and Executive Director Lee Schofield has resigned with immediate effect. Mr Schofield resigned for personal reasons.
“The Board would like to express our sincere thanks to Lee for his commitment and contribution to Alliance over the last ten years and during the last seven years as Chief Executive Officer. We wish him well,” said Alliance’s Chairman, Steve Padgett. Current Alliance Airlines Managing Director Scott McMillan will assume the CEO’s role.
Alliance Airlines will release its annual results after the market closes on Wednesday, August 10.