Virgin Blue adds WA routes

VIRGIN Blue Airlines' announcement late last month that it would significantly expand its presence in Western Australia with the launch of two new destinations - Karratha and Newman - has significantly increased the level of competition in what is a very crowded airline market.

WA is now served by nine jet operators on intrastate routes - Qantas, QantasLink, Skywest, Network Aviation, National Jet Systems, Virgin Blue, Alliance, Oz Jet, and Air North.

The combined fleets dedicated to intra-WA operations total nearly 40 jets seating from 75 to 180 passengers, with a similar number of turboprop aircraft typically seating between 15 and 40.

From October 21, Virgin Blue will launch direct double daily flights from Perth to Karratha and Newman with its new factory fresh 104-seat Embraer E190 jet aircraft, while from October 15 the airline will double flights between Perth and Broome.

At the same time, Qantas will ramp up its flights between Perth and Kalgoorlie, Newman, Paraburdoo and Port Hedland.

According to Qantas Regional GM Western Australia, Ian Gay, the increases followed earlier capacity increases introduced in June.

The new services will include another two weekly services to Paraburdoo, two extra weekly flights to Kalgoorlie, and five additional weekly services to Newman.

These additional services will result in Qantas and QantasLink operating 146 return flights a week from Perth to Broome, Kalgoorlie, Karratha, Newman, Paraburdoo, and Port Hedland.

And the airline is also adding a second weekly Brisbane to Karratha flight from October 26, while from February next year Qantas will be upgrading many of its Port Hedland flights from 717s to 737-800s.

The Virgin Blue move is both bold and fascinating, as the "value airline" champion brings its style of flying to the mining industry.

Virgin Blue chief executive Brett Godfrey told WA Business News the investment in WA was significant for the Virgin Blue Group and demonstrated the airline's confidence in the potential of the WA market.

"Karratha and Newman are both key mining destinations where we believe we can bring some great advantages in terms of schedule reliability and competitive fares. We will be working closely with the mining sector and those companies that provide support services to the mining industry in these regions and are eager to demonstrate our commitment to providing a viable travel option tailored to their needs," Mr Godfrey said.

The expansion is Virgin Blue's second and its largest foray into intra-WA services following the introduction of Broome-Perth flights in September 2004.

Virgin Blue has also lowered the fare on the Karratha and Newman routes with lead-in fares at $219 and $219 one way, which it claimed at the time were 25 per cent less than its competitors, although Qantas' lowest fares are identical.

The challenge for Virgin Blue is to tap into the local resource market, where long-term relationships and commitment to WA are key factors.

The spectacular rise of Skywest Airlines since industry veteran Hugh Davin rejoined the company as managing director is testimony to the power of relationships.

Mr Davin started his career in the WA airline industry flying many of today's resource CEOs to exploration sites when they were fresh out of university.

Another player that has built up its operations through relationships is Network Aviation, the quiet achiever at Perth Airport. Network now has a fleet of three Fokker 100 jets and six Brasilia turboprops.

For Virgin Blue, the challenge is to continue with its marketing and code-share alliance with Skywest Airlines forged at the beginning of this year, while not crossing swords with Skywest as it chases resource business to both Karratha and Newman.

"We will just have to wait and see what the market dictates," Mr Davin said.

"We have schedule options and we listen to the timing demands of the mining industry."

Also on Virgin Blue's radar as part of resource contracts are long term fly in, fly out charters, with the 104-seat E-190 considered an ideal platform as more and more resource companies lengthen their runways to accommodate a wider variety of aircraft operations in summer conditions.

Some executives at Perth Airport, who declined to be named, told WA Business News they were miffed at Virgin Blue's entry, seeing it just as a redeployment of aircraft as the eastern states market softens.

But Virgin Blue says it's in for the long haul, as it has demonstrated around Australia and New Zealand.

However, there is no doubt that the Skywest Airlines/Virgin Blue relationship will be tested over the 12 months.

And next year, Skywest will roll-out its new flagship 180-seat A320s for both key clients and RPT services to centres such as Karratha, Port Hedland and Broome.