For FIFO charter Alliance Airlines, COVID-19 disruptions mean big business

For FIFO charter Alliance Airlines, COVID-19 disruptions mean big business

Date of Report 07/09/2021
ASX: AQZ

Price A$4.1

52 Week Range: A$3.10 - 4.92

Market Cap: A$658.61m

Sector: Transportation

Every second week we invite a leading fund manager to present at 'The Insider: Meet the Fund Manager' Joel Fleming from Yarra Capital Management selected Alliance Airlines (ASX: AQZ) as one of his 3 favourite stocks, a company with major clients in the mining industry looking for alternatives to the big airlines

January 29th, 2021

June 23rd, 2021

The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading funds managers. They share their approach to investing, favourite companies and their market view for the year ahead.

The Insider: Meet the CEO sessions feature a selection of company leaders who provide a succinct overview of big things their companies are doing. 

With most domestic flights at a standstill, it might seem counterintuitive to invest in aviation. Alliance Airlines (ASX: AQZ) has proven, however, that with disruption comes great opportunity.

Alliance Airlines transports FIFO miners across Australia’s vast landmass, to some of its most remote regions.

In the past, miners would typically jump on a Qantas or Virgin flight to get to site. The impacts of COVID-19 on the major airlines, however, mean mining companies are looking for other options like Alliance.

“They are the solution that allowed many mining customers to continue to operate through the COVID-19 period,” said Yarra Capital Management’s microcaps portfolio manager Joel Fleming, who pointed out Alliance Airlines as one of his top picks for microcap stocks.

“This is a really unique example of a potential structural shift in the market,” added Mr Fleming.

According to Alliance’s CEO, Lee Schofield, disruptions to aviation like September 11, the GFC, SARS, the mining downturn, and now COVID-19, have tended to help, not hinder, the business.

“We have shown through all of those periods of disruption that we can actually generate new opportunities and thrive,” said Mr Schofield. 

Armed with long-term contracts with major clients and a business model that reduces fuel consumption and passenger risk, Mr Fleming said that Alliance is ready to take a significant, long-term share of the FIFO market.

“We wouldn’t be surprised over the next 12 months if we see some pretty impressive contracts come through which really underwrite the long-term profitability of this business,” said Mr Fleming.

Click here to view more videos from Joel Fleming’s ‘Meet the Fund Manager’ session, or click here to view the full ‘ The Insider: Meet the CEOs’.

 

The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.

Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.

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The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.