Alliance Aviation Services Limited (ASX: AQZ) shares are off to the races today.
Shares in the contract and charter airline stock closed yesterday trading for $2.83. At the time of writing, shares are swapping hands for $3.23 apiece, up 14.1%.
Alliance Aviation has long been a takeover target of industry giant Qantas Airways Ltd (ASX: QAN).
On 5 May 2022, Qantas and Alliance entered into a scheme arrangement that valued Alliance Aviation at $4.75 per share. That takeover was blocked by the Australian Competition and Consumer Commission in April this year.
But that's not why Alliance Aviation is having such a stellar run today.
Image source: Getty Images
What's spurring ASX investor interest?
Alliance Aviation shares are flying high today after the company upgraded its profit guidance for the 2023 financial year (FY23).
With more contracted aircraft in service, the airline raised the forecast for its unaudited underlying FY23 net profit before tax to $56.9 million. Prior guidance was for net profit before tax to come in between $50 million and $55 million.
Expenses for operational and training expenses incurred in building capacity for FY24 remain unchanged.
Also potentially offering a boost to Alliance Aviation shares was the announcement that the airline has inked a new five-year contract with a subsidiary of mining giant Incitec Pivot Limited (ASX: IPL). Alliance will provide eight weekly flights between Townsville and its mine and operations at Phosphate Hill in Queensland.
Alliance Aviation's managing director Scott McMillan noted, "Our first Fly in Fly Out (FIFO) contract executed in 2002 was for the provision of services between Townsville and Phosphate Hill."
McMillan added:
The long tenure of this contract is attributable to our superior operational capability, which is focused on delivering safe, reliable and on time services. Longevity of customer relationships based upon the high standards we provide is the cornerstone of our success in the FIFO sector.
Alliance Aviation will release its full FY23 results after the closing bell on 9 August.
How have Alliance Aviation shares been tracking?
With today's big boost factored in, Alliance Aviation shares are back in the green in 2023, up 4% year to date. Shares remain down 6% over the past 12 months.
