Small airlines and larger carriers are at loggerheads over the state government’s proposed changes to the regulation of regional aviation in WA. Natalie Gerritsen reports.
THE regional aviation industry is divided over a state government push for regulatory change, with some smaller airlines saying the changes don’t go far enough to ensure a fair go for all operators.
But Western Australia’s largest regional airline, Skywest, says the system shouldn’t be changed at all, and is frustrated its bid for some coastal routes has been knocked back.
Currently, WA has a mix of deregulated higher population routes, combined with regulated and some subsidised routes to smaller towns.
Demand for services in regional areas has grown dramatically during the past decade as the resources boom draws more workers out of Perth.
The big players in the industry are Skywest and Skippers Aviation, which face competition from national carriers Qantas and Virgin Blue, and smaller airlines such as Airnorth.
The government’s new regime aims to introduce more competition into some of the regulated routes, which were introduced after the collapse of Ansett in 2001.
While the government is set to release the full details of its new regulatory regime in the next two weeks, from March the Perth-Geraldton route will become fully deregulated and the Perth-Exmouth route will be opened to two carriers, one of which is Skywest.
Final contract negotiations on most routes are still taking place but currently no proposal has been accepted to link Perth with Carnarvon, Monkey Mia and Kalbarri, a situation Skywest chairman Jeff Chatfield describes as “unsettling”.
Skywest currently operates the routes, and re-tendered this year but has been told its submission was not successful.
“Skywest put in an absolute concrete submission for those ports. It flies there now, it wants to continue to fly there and it’s flown there for a long time,” Mr Chatfield says.
Skywest is still in talks with the government, but Mr Chatfield is unhappy with the push towards deregulation, telling Business Class he thinks the system was working well as it was.
However, an industry source, speaking to Business Class on the condition of anonymity, says the government needs to make stronger changes to the regulations, which make it too difficult for many smaller airlines to gain a foothold in the sector.
“(The government) looks after two operators, one is Skywest, which is owned offshore, and the other is Skippers, which is owned by one of WA’s wealthiest men (Stan Quinlivan),” the source says.
“I think it penalises the little bloke, because the little bloke can’t expand.”
Mr Chatfield, however, thinks smaller regional airlines aren’t being realistic in their expectations.
“The entire country of Australia wasn’t capable of supporting three airlines ... so why do they think that a state with only a couple of million people can economically support an endless number of airlines,” he says.
Maroomba Airlines owner Steve Young says he believes the state can afford to open the sector up to more competition.
“You may get competition for a little while, which will drive prices down, which is what the travelling public want, and ultimately one operator will probably survive on the smaller routes,” he says.
Keith Russell owns Golden Eagle Airlines, which currently operates flights between Broome, Fitzroy Crossing and Halls Creek.
He’s been advised that the subsidised routes will remain with the company, but doesn’t yet know the outcome of his application to fly a larger-capacity plane on the route.
Right now, regulation limits the number of passengers Golden Eagle can fly, with excess demand being picked up by dozens of charter flights each week, despite charters being banned on the route under the current regulations.
Mr Russell thinks that by allowing him a larger carrier, the demand would be there for a commercially viable service, which may not even need a subsidy in the future.
Regional airports are investing in redevelopment to ensure they can keep up with the resources-led increase in demand.
Karratha Airport is the state’s busiest regional airport, with passenger numbers rising more than 20 per cent over last financial year, from 497,000 to 620,000.
Airport manager Chris Fox estimates that half of those passengers travelling through Karratha are fly-in, fly-out workers.
The Shire of Roebourne has invested $29 million during the past two years expanding the airport to cope with increased demand, extending the main runway, expanding the car park and constructing a new baggage handling facility.
The state government’s regional aviation development scheme, the first of its kind in the country, has this year allocated almost $7 million to 37 airports to ensure they can keep up with demand and maintain safety standards.
Port Hedland International Airport will receive just over $800,000 to begin planning for an expansion to the terminal and taxiways to keep up with demand.
The town’s Airport Committee chairman Arnold Carter says traffic at the airport has increased by 40 per cent during the past five years, to more than 295,000.
While some airline owners still want more investment in regional airports, they recognise standards are probably as high as they can be for a state with so many small, sporadically used landing strips.
“We’re very unique in the world that we have so many gravel unsealed strips where the rest of the world just wouldn’t hear of it,” Mr Young says.
“But because of our low population and the number of our airports, we have to have it.”
And Mr Russell has a message for suited-up executives expecting lattes and chardonnay to materialise out of the red dust.
“You can’t put Perth Airports everywhere. Some people want Qantas lounges everywhere. They’re flying into a town to make quick money then flying out again, well ... toughen up baby.”
