The Alliance Aviation Services Ltd (ASX: AQZ) share price is taking off this morning. The price movement comes after the company announced it will be continuing its work with Santos Ltd (ASX: STO).
At the time of writing, shares in the charter air service are selling for $4.26, up 2.9%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.86% higher. The Santos share price is down 0.7% at $7.07.
Let's take a closer look at today's announcement and how it's affecting the Alliance share price.
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Alliance share price soars on latest deal
The Alliance share price is rising today. In a statement to the ASX, Alliance announced it is extending its contract for services with Santos for an additional 5 years — backdated to 1 April 2021.
As a result, Alliance will continue to operate services from Adelaide and Brisbane to Santos airports within the Cooper Basin for Fly-in, Fly-out (FIFO) workers. The Cooper Basin is Australia's major oil and gas field. Santos is the largest operator in the area.
As well, Alliance will now fly between Santos' Moomba and Ballera airports in the basin. The contract also extends its operations between Perth and Karratha, which began during the COVID-19 pandemic.
Words from the CEO
Speaking on the deal, Alliance CEO Lee Schofield said:
Alliance has been operating services for Santos since 2006 and we are excited that this extension will see us operating for Santos for a period of at least 20 years. This extension was won as a result of Alliance's ability to continue to operate safe, reliable and cost-effective air charter services for Santos.
The addition of the intra-field services and the Western Australia service further cements the long-term relationship built over many years. Once again our operational expertise has proven to be the key to retaining long term contracts and increasing existing schedules and our national footprint was a significant factor.
Recent announcements which rocketed the Alliance share price
On Thursday, the Alliance share price also shot up 5.34% after the company announced more good news on the day. In its statement, the company declared it "received regulatory approval from the Civil Aviation Safety Authority (CASA) to commence commercial operations with its Embraer E190 aircraft and a revised Air Operators Certificate has been issued."
Alliance purchased 30 aircraft total, with the goal of expanding its operations. At the time of the announcement, Alliance paid for and received 18 aircraft. The remaining 12 are set to be delivered progressively until November 2021.
Alliance share price snapshot
Over the last 12 months, the Alliance share price increased by 127.03%. It is one of a very few aviation companies to thrive during the pandemic. Demand for its services grew last year as people looked for safe and reliable alternatives to commercial flying in 2020.
The Alliance share price reached its all-time record of $4.68 in February this year.
The company has a market capitalisation of $664.4 million.
