Alliance Aviation (ASX:AQZ) Shares Face Balance Sheet Reset After Impairments

Alliance Aviation Services stock came into this result flat over the past week at A$0.90, following a strong run over the past three months. The headline today is not the share price; it is the size of the earnings reset and what that indicates about the balance sheet.

FY26 produced an underlying profit before tax of A$38.2m, yet a statutory loss before tax of A$129.9m after heavy non-cash impairments on the Fokker fleet. Management has moved quickly with a A$40m equity raising and a A$60m to A$75m asset sale plan to reduce leverage, which now becomes the main lens for long-term investors.

Is Alliance Aviation Services a genuine value opportunity at a low P/S multiple, or is the weak interest cover and unprofitable trailing record a warning sign? See how the current share price compares with cash flow assumptions and peer multiples in the full valuation analysis for Alliance Aviation Services

FY 2026 Earnings Summary

• Revenue (FY26 vs FY25 H2): A$708.5m for FY26 (H1 A$367.2m, H2 A$341.3m), compared with A$434.1m in FY25 H2 (directionally lower on this half year comparison).
• Net Income / Loss (FY26 vs FY25 H2): Net loss of A$90.9m for FY26 (H1 loss of A$105.8m, H2 profit of A$14.9m), compared with net profit of A$28.5m in FY25 H2 (shift from profit to loss on a full year view).
• Basic EPS (FY26 vs FY25 H2): Basic loss per share of A$0.5643 for FY26 (H1 loss of A$0.6572, H2 earnings of A$0.0927), compared with earnings of A$0.1769 per share in FY25 H2 (movement from profit to loss at the annual level).
• Underlying EBITDA Margin (FY26 H2 vs FY26 H1): Underlying EBITDA margin of 26% in FY26 H2, compared with 24% in FY26 H1 (improving margin in the second half).

Tired of scrolling through dense earnings releases and impairment notes trying to make sense of Alliance Aviation Services? Get a clear, visual view of the company’s balance sheet strength and funding mix in the full company report for Alliance Aviation Services.

Alliance Aviation bullish reset tested against hard numbers

Bulls argue Alliance Aviation Services is a solid contracted flyer temporarily hit by accounting noise and fixable wet lease issues. The FY26 print gives some support to that view. Underlying PBT of A$38.2m sits within revised guidance and H2 underlying PBT grew 61% versus H1 as cost and commercial changes came through. Underlying EBITDA margin lifted from 24% to 26% in H2, which lines up with management claims that core fly in fly out contracts remain resilient, with on time performance near 95%. The renegotiation of the largest wet lease with Qantas, including a price uplift and escalators and a planned reduction from 30 to 23 E190s in FY27, is also a clear milestone for the bull case that the weakest contracts can be reshaped rather than abandoned.

Bear case on leverage, execution and asset risk

The bear case centres on underpriced wet leases, overextended fleet growth and balance sheet stress. FY26 results do not dismiss those concerns. Statutory PBT was a loss of A$129.9m after non cash Fokker impairments and the company reported a net loss of A$90.9m. Net debt of A$459.8m remains high relative to underlying EBITDA, even with a target to bring net debt to EBITDA to about 2.1x by June 2027. Alliance Aviation Services now depends on a fully underwritten A$40m raising, amended bank facilities and a planned A$60m to A$75m asset sale program. Management also flags execution risk on aircraft and hangar disposals, particularly for the Fokker fleet, which means the balance sheet repair still sits at the intention stage rather than fully achieved.

Access where the surface looks calm but the models start to diverge on Alliance Aviation Services, and see where the consensus breaks across revenue, margins and free cash flow through the full forecast horizon in the analyst estimates for Alliance Aviation Services.

Take Control Of Your Next Move

If the mix of underlying profit and heavy impairments at Alliance Aviation Services has you watching for a cleaner balance sheet, register for free with Simply Wall St and add the stock to a Watchlist so you can track price against fair value and wait for an entry point that fits your plan. Once you are invested, use the Portfolio Command Center to keep on top of material updates while filtering out the noise. For longer term thinking, the Community helps you see how other investors are interpreting the same numbers and events. By spotting potential catalysts and risks early, you give yourself a better chance to act with confidence and stay ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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