Skywest could quit north-west services

Skywest is considering withdrawing its four-times-weekly service to Karratha and Port Hedland unless it gains critical resource industry support.

According to industry sources, the viability of Skywest’s service to the two towns has been seriously eroded because Qantas has a stranglehold on the long-term resource contracts. This could also put at risk the airline’s popular weekly Port Hedland-Bali service.

Skywest chief executive officer Johanna Ramsay confirmed that the “services were under review” and “discussions were being held with key customers”.

WA Business News understands that Rio Tinto at least was keen to assist the airline and was looking at providing some business to Skywest into Karratha.

Skywest needs about 30 per cent of the available business to be able to support double daily services to both centres and thus mount effective competition to Qantas and QantasLink.

Industry commentators suggest that the mining giants were very keen for Skywest to enter the route when tenders were under way but have given all the business to Qantas, leaving Skywest to pick up the crumbs – low yield friends and relatives traffic.

There have been several casualties on the north-west routes over the years.

In the 1980s, both East-West Airlines and Trans Australian Airlines were forced to withdraw from the intra-state market, and in 2000 QantasLink withdrew from the Perth-Port Hedland route because it could not secure any work from BHP.

After Ansett’s collapse in September 2001 the administrators revealed that, in June 2001, the airline was planning to abandon all its routes within WA in a significant downsizing to avoid collapse.

Chamber Minerals and Energy policy and external relations director, David Parker, acknowledged the critical role resource companies played in aviation in WA.

“The resource sector is the most significant customer of the airlines and studies show that half of the state’s operational resource workforce commutes predominantly by air on top of the significant corporate traffic,” he said.

Mr Parker added that: “The industry recognises that it is a critical player in the aviation industry in Western Australia. Resource uses a mix of regular public transport and charter services, which then both integrate and contribute to the strength of the industry.

“Industry has always sought open and competitive aviation markets and is keen to ensure that the industry had a range of service providers and aircraft capa-bilities,” Mr Parker said.

Skywest has five 46-seat Fokker 50s turbo-props and three 97-seat Fokker 100 jets, but one of the jets will be returned to the lessor if the airline is forced to withdraw from Karratha and Port Hedland.

But it’s not all challenging news at Skywest.

Ms Ramsay told WA Business News the airline’s jet operations into Broome and Kununurra were “working well and the airline is looking to increase services”.

Skywest has just announced an extension of its Perth-Exmouth jet services to Broome. The airline serves Exmouth daily with either Fokker 50 or Fokker 100 jet aircraft to support both Woodside and the booming tourist industry.

Skywest is the only airline offering pure jet connections between WA’s key north-west tourist destinations of Exmouth, Broome, Kununurra and Darwin.  It recently won an extension to October 2007 of its Rio Tinto Argyle contract and is considered a major player in the tender for BHP Leinster and Mt Keith.

The race for that contract almost needs to be run in two heats, with a big field that includes Qantas, National Jet Systems, Skippers Aviation and Queensland-based Alliance Airlines.

Skywest’s coastal contract with the state government for routes to Albany, Esperance, Geraldton and Carnarvon is performing well and Ms Ramsay told WA Business News the airline will lease another Fokker 50 – its sixth – from Malaysia Airlines, which will arrive in two months.