Quickstep has inked a Memorandum of Understanding (MOU) with Alliance Aviation as it works to rebuild its Aftermarket business on the back of an Australian airline industry recovering from the Covid-19 pandemic.

Quickstep Holdings (ASX:QHL) has signed a strategic MOU with Alliance Aviation (ASX:AQZ) opening a period of detailed negotiation to secure formal contracting arrangements in support of the airline’s growing fleet of Embraer E190 aircraft.

Australia’s largest independent aerospace composite manufacturer said the scope of the MOU is significant and seeks to provide a unique component repair capability to the AQZ fleet expansion program. Key outcomes intended from the MOU include:

  1. A multi-year component support agreement for the AQZ Embraer E190 fleet
  2. Onshore composite, metal, and bonded component support in partnership with the global supply chain
  3. Onshore nacelle support provided by QHL with support from the original equipment manufacturer
  4. On-site technical support at the new AQZ heavy maintenance facility in Rockhampton

QHL CEO and managing director Mark Burgess said Alliance is a great Australian airline pioneer operating a large domestic fleet.

“Their fleet expansion program is expected to result in them growing to be the largest operator of the Embraer E190 in the world,” he said.

“Alliance have a strong desire to build domestic MRO capability as evidenced by their investment in Rockhampton.

“Quickstep is proud to be in a position to offer this Australian supply chain solution as Alliance continue their remarkable growth story.”

AQZ managing director Scott McMillan said the airline looks forward to working with Quickstep to turn the MOU into “tangible infrastructure”.

“It’s particularly important for the aviation industry in Australia that we work with suppliers like Quickstep to build onshore skill sets and repair capability to achieve prompt turnaround times on component repairs and maintenance,” McMillan said.

Review outlines steps for Quickstep’s core aftermarket business 

The MOU with AQZ follows a recent detailed and comprehensive strategic review process of QHL’s aftermarket business which will be enhanced to capitalise on the growth of the domestic and regional aviation market.

QHL’s after-market business was acquired from Boeing during the pandemic and was further negatively impacted by the longer aviation recovery in the Australasia and Asia Pacific markets, as compared to the rest of the world.

However, the airline and charter markets in Australia are now seeing very substantial recovery, increases in flight hours and a return of capacity – all of which fuels the revenue outlook for QHL’s Aftermarket business,  which provides composite parts and repairs large components on commercial aircraft.

This article was developed in collaboration with Quickstep Holdings, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.