Alliance Aviation Services (ASX:AQZ) reported a challenging first half for the 2026 fiscal year, characterised by a statutory net loss after tax of $105.8 million.
While the company’s core fly-in fly-out operations remained resilient due to a strong resources sector, overall performance was heavily weighed down by a "commercially unviable" wet-lease arrangement with a major customer.
The financial results were further impacted by a $164.8 million impairment regarding the company’s Fokker fleet and inventory write-downs.
Despite record flight hours and increased revenues, Managing Director Stewart Tully noted that margin pressures necessitated a strategic pivot.
The company has ceased aircraft trading activities and is currently renegotiating the troublesome wet-lease contract to stabilise its bottom line.
To steer back toward profitability, Alliance has launched an aggressive operational turnaround plan.
The strategy prioritises disciplined capital allocation, free cash flow generation, and an organisation-wide review of its cost base.
The company's net tangible assets stood at $2.22 per share as of Dec. 31, 2025, which represents a discount to independent fleet valuations.
Alliance has revised its full-year profit before tax guidance to between $35 million and $40 million.