It is good to see that AQZ have secured some medium term funding...

It is good to see that AQZ have secured some medium term funding to finance the balance of the E190 purchases and associated engineering costs to get then flying. The fixed interest rates with a weighted average cost below 3% compares favorably with the weighted average interest rate of 3.1% as at 30 June 2020 on the previous facilities from ANZ and CBA.

The announcement yesterday noted that the new facilities provide significant headroom for future expansionary opportunities, which suggests that management still see plenty of opportunities out there. First of all, I look forward to managements confidence that the 30 E190's can be successfully deployed playing out.

Securing this debt funding that covers existing aircraft purchase and commissioning costs increases the possibility that AQZ will declare a dividend for the year ended 30 June 2021. No final dividend was declared for FY20 not an interim dividend for FY21 due to the fleet expansion cash flow requirements and the FY 19 interim dividend was cancelled to provide maximum COVID 19 balance sheet flexibility. The 31 December 2020 results presentation noted that AQZ had fully utilised its tax losses and would be in a cash tax paying position for FY21. The December 2020 current liability for income tax payable was $7.2 million, so I would expect there to be a significant boost to the franking credit account this year. The brought forward balance at 30 June 2020 was $7.647 million, so the effective balance by 30 June 2021 could well be approaching $20 million, which provide plenty of scope to declare fully franked dividends. Having said that, I expect any FY21 final dividend amount to be on the conservative side.