Alliance Aviation Services Ltd

Multiple managers flagged the November 7 2025 surprise earnings downgrade and management changes that triggered a heavy selloff (down 41-45% in the month), driven by an unbudgeted increase in the purchase price of remaining Embraer E190 aircraft, higher repairs and maintenance costs, higher depreciation charges, one-off expenses, and a potential issue with wet lease contracts (NGE Capital, Perennial Partners, Ellerston Capital, Seneca Financial Solutions, all ~$1.33). This also led Pacific Equity Partners to walk away from its takeover interest and raised doubts about future earnings potential and high debt levels needing to be addressed via non-core asset sales. Ellerston noted the revised FY26 guidance also reflected contract disputes and inventory management system implementation headwinds, impacting free cash flow and deleveraging ability. By May 2026 (~$0.61), Yarra Capital Management said it had sold its long-held position given moving fuel prices and an onerous contract structure, feeling the market environment had fundamentally changed for the business. Raper Capital (March 2026, ~$0.60) laid out the bear case in detail: net debt exceeding $400m against a market cap under $100m, a large recent impairment, cash burn, a pending renegotiation of the Qantas wet-lease agreement, and going-concern language in the accounts, framing the position as carrying real risk of being “zeroed.”