Australia’s Alliance Aviation has renegotiated its long-running wet-lease agreement with Qantas.
Under the new agreement, Alliance will receive what it described as a “meaningful” increase in pricing, alongside a new annual escalation mechanism designed to better reflect future cost increases. The number of aircraft allocated to Qantas will meanwhile be progressively reduced from 30 to 23 during FY2027 as contracted flying hours decline.
Alliance began supplying E190s to Qantas in 2021, with the aircraft operating in QantasLink colours across domestic and regional routes. The arrangement subsequently expanded to 30 aircraft. However, earlier this year Alliance revealed that the agreement had become “commercially unviable and cash flow negative”, following insufficient repricing and significant margin erosion. The company recorded a statutory AU$105.8m loss for the six months ending December 31, 2025.
Managing Director Stewart Tully said the revised agreement should deliver a material improvement in profitability, returns and cash flow. The reduction will also release aircraft for alternative opportunities and lower Alliance’s committed capital.
Alliance will also begin consultations to resize its workforce and operating model in line with the reduced flying programme.
