Yes, very surprising to see the share price off a bit after today's announcement, especially given the reiteration of the earlier comment that AQZ is confident is deploying the E190 fleet.
So we now have QAN committing to a total of eight E190's for three years, with options left over a further six aircraft. Yesterday's QAN announcement on their property review included the following comment:
So I'm assuming plans are well advanced on deploying the remaining six aircraft covered by the QAN option. These leaves open the question of where Virgin regional flying is at, with still no announcement. Given QAN's eagerness to put the initial part of AQZ's new fleet to work, I'm assuming that there are no or limited aircraft that AQZ would be able to deploy on Virgin routes for quite a few months, so maybe Virgin are keeping their plans close to their chest until they are in a position to start operating. I'm assuming AQZ's own organic growth will also use some of the E190 capacity.
I wouldn't be a fan of any wet lease deal with REX unless all fees were
paid in advance of the flying occurring. Surely QAN's expansion of regional flying into REX's previous monopoly space (I see Burnie has been added today) and the reports of poor loadings and price discounting of their B737 routes means that their financial viability has to come into question soon.
We have also see the announcement this week that the Australian Government has committed $25 million in funding to help Alliance Airlines bring a Maintenance and Repair facility to Rockhampton. This is a massive amount of Government help. Given the material increase in fleet numbers recently, it makes sense that AQZ faces the need to expand its maintenance facilities in addition to recently acquired Toll Aviation Engineering in Brisbane.
I'd be surprised if we see any (or perhaps only a small) dividend for FY21 given the ongoing capital spend, however as long as AQZ keeps kicking goals I am more than fine with that.
(20min delay)