The skies over Western Australia are set to be the most hotly contested in Australia as the lure of fly-in /fly-out contracts adds new operators and larger aircraft.
The skies over Western Australia are set to be the most hotly contested in Australia as the lure of fly-in /fly-out contracts adds new operators and larger aircraft.
Last week, Skywest Airlines stunned local analysts – and some of its staff – by announcing the lease of four 180-seat A320s to bolster its competitiveness, while Brisbane-based Alliance Airlines last month snared from Qantas the hotly contested BHP Billiton Nickel West contract to serve Mount Keith and Leinster.
At the same time, National Jet Systems (NJS) has just added another 65-seat BAe146 to its fleet, which now numbers 10 aircraft.
Additionally, NJS has completed deployment of eight 106-seat Boeing 717s under the Qantaslink brand and may yet deploy more air-craft, although probably not in WA.
The Skywest announcement was as bold as it was innovative, with Icelandic transport group Avion, which owns 61 aircraft, carrying the cost of the deployment and operation in a profit sharing after-costs arrangement with Skywest. The WA carrier has been the subject of a takeover by Singapore-based CaptiveVision Capital Ltd, a subsidiary of Skywest’s major shareholder, Advent Air.
The A320s will be placed on the Australian register and further aircraft may be added as applicable for seasonal work, if demand is sufficient, under temporary importation arrangements.
Importantly, neither Advent Air nor Skywest Ltd is exposed to the capital investment risk.
But while the deal is innovative, Skywest will also need to be innovative in deploying the jets.
In a statement, Advent Air and Skywest chairman Jeff Chatfield said the strategy behind the deal lay in the airline’s need to meet “increasing demand for air travel in the region along with increasing tourism growth” while at the same time getting highly fuel-efficient aircraft.
Mr Chatfield expected the A320s would be used on Broome, Karratha and Darwin services, releasing the 96-seat Fokker 100s for more FIFO contracts.
Skywest has announced that the 180-seat A320s will be recon-figured with 86 centimetre seat pitch, which will result in a 168-seat all economy configuration.
Mr Chatfield said Skywest could possibly launch services to the east coast, although he emphasised the short-term priority was on the existing routes.
The A320s to be used are presently in service with European charter airlines Star Airlines and German Star.
In June, Skywest announced the new flights and schedules on its Broome and Darwin routes.
From July 24, Skywest added three additional services to offer a daily return flight between Perth and Broome.
Skywest CEO Johanna Ramsay said the introduction of the daily Broome service was a direct reflection of market demand.
“Our Broome and Darwin ser-vices are full and we are getting great support from the public,” she told WA Business News.
The airline also rescheduled its Perth and Darwin flights to depart three mornings a week.
“Rescheduling the Darwin fights from afternoon to morning results in a more conducive schedule that suits the travelling needs of our passengers,” Ms Ramsay said.
She also praised Rio Tinto for its support on the airline’s thrice-weekly Perth-Karratha/Port Hed-land services, which were under serious threat due to lack of industry support.
“Rio Tinto has been fantastic and BHP is also talking to us about add-itional support,” Ms Ramsay said.
On the A320s, she suggested the airline wasn’t interested in taking on Qantas over interstate routes but would look at other innovative routes such as Perth-Kalgoorlie-Sydney with the A320s.
Skywest’s Fokker 100s have the range to operate from Kalgoorlie to Adelaide non-stop but the A320s would be needed to operate greater distances.
That style of strategy would also help the airline’s current Perth-Kalgoorlie turboprop 46-passenger Fokker 50 service, which is struggling against Qantas’ Boeing 737 operations.
Typically, it takes up to six months to get a new aircraft onto an airline’s Airline Operating Certificate, although the Civil Aviation Safety Authority quotes a minimum of 120 days, which means Skywest could be operating the aircraft by early next year – low season for tourists in the north-west.
The move to the A320s is Skywest’s answer to new competition from Alliance Airlines and the stiff competition from Qantas and NJS.
The Queensland-based Alliance Airlines has flown away with the hotly contested five-year BHP Billition contract for Perth-Mount Keith and Leinster, thus establishing a foothold in WA and eagerly looking for more work.
Alliance has a close working relationship with BHP with its operations into Mt Isa.
The Perth-based contract is the airline’s sixth FIFO contract and the airline has eight Fokker 100 jets.
Currently, Alliance flies 65 FIFO trips weekly to five mining areas in the Mt Isa region. The new WA operation will result in employment for 23 new staff based in Perth.
Alliance Airlines will operate a Fokker 100 demo flight on August 30 to Mt Keith and Leinster, although the contract starts on November 1.
However, while the FIFO contracts appear lucrative they are in many cases short term, usually involving the construction phase.
Some local industry observers reflecting on the new players and additional aircraft suggest there are going to be tears.
They point to the reality that most of the major contracts are sewn up for years to come.
And the operation that has snared the majority of the contracts is NJS, with its fleet of versatile BAe146 and RJ70s.
The operational secret to NJS’s success is its aircraft, which are the best suited to short runways and severe conditions typical of many mining airstrips in the north-west.
NJS has been achieving reliability of 99.97 per cent on many contracts – the sort of reliability that brings extensions on contracts.
However, it is on intra-state scheduled services that the greatest competition is expected.
Qantas, QantasLink, Virgin Blue and Skywest are expected to be joined by Qantas’s low cost subsidiary Jetstar, which now operates into Perth from Victoria.
Jetstar is expected to operate to tourist destinations such as Broome, with Qantas and QantasLink continuing to serve mainly business and FIFO contract destinations.
