Aviation SPECIAL REPORT Aviation FEATURE

PRIORITIES: and Alliance are competitors in the fly-in, fly-out market, but have different strategies in the leisure market. Photo: Gabriel Oliveira

airports recorded their lowest pas- senger numbers in a decade. The changing shape of the sector has been illustrated by new data supplied to Business News by . REGIONAL The number of intrastate pas- sengers using Perth Airport increased by 5.5 per cent to 4.26 Mark Beyer million in the year to June 2019. [email protected] That was preceded by one year AVIATION ON @AMarkBeyer of small growth (0.9 per cent in 2017) and several years of big VERY major airport in declines. Western achieved A Perth Airport spokesperson Egrowth in passenger num- said the surge in regional pas- bers last year, with Broome and senger numbers confirmed the THE RISE hitting annual records. renewed confidence and activity The growth has been under- in the state’s resources sector. Air travel in WA has pinned by a pick-up in resources The rise is good news for sector activity along with servicing regional WA, including started to recover from an increased domestic tourism. Qantas, , Cobham It marks a recovery from the Aviation Services, and Alliance Avi- extended slump. nadir of 2017, when most regional ation Services. REGIONAL AIR TRAVEL - ON THE RISE ANNUAL PERTH AIRPORT PASSENGERS GROWTH Intrastate 4.26m 5.50% International 4.37m 0.20% Fokker 70 charter between Perth Interstate 5.87m -0.20% and Uluru, offered by Alliance Avi- Total Passengers 14.51m 1.50% ation Services in partnership with REGIONAL AIRPORTS Japanese travel wholesaler JTB. Regional general manager Kalgoorlie 289,000 14.7% Russell Bryant said Alliance had Newman 306,000 7.4% been working on creative ways to Paraburdoo 178,000 7.2% build its business out of Perth and Albany 60,633 7.2% broaden its operations from char- Broome 416,000 7.1% ter services to include tourism and Port Hedland 379,000 7.1% leisure opportunities. “JTB have already committed to Learmonth 88,000 6.9% a number of Uluru daytrip charters Kununurra 74,000 6.1% departing Perth over the coming Esperance 51,274 1.5% months and we are in discussions Geraldton 113,000 1.3% with them over further growth in Karratha 441,000 0.5% tourism charters from Perth,” Mr Bryant said. Source: Perth Airport, for year to June 2019; BITRE, for year to Dec 2018 Alliance already has a similar partnership on the east coast with US travel group Tauck. It expects Broome surpassed the previous by a similar amount, while Karratha a minimum of 70 charter flights record set in 2013. was up by just 0.5 per cent. per year after signing a contract The big driver has been tourist In each case, the growth in 2018 extension with Tauck late last year. traffic, bolstered to some degree came after five years of precipitous Brisbane-based Alliance has by the resources sector. falls. been operating in WA since 2006 The latter comes in two ways: The most dramatic example is when it won its first FIFO contract Broome is a hub for mining and oil Karratha, where passenger num- with BHP Nickel West, and now and gas projects in the Kimberley bers peaked at about 818,000 in flies to a dozen ports. and is also one of five regional 2012 at the height of the resources Perth Airport chief executive towns – along with Busselton, construction boom before plung- Kevin Brown said the Alliance-JTB Carnarvon, Derby, and Albany ing year after year to just 439,000 partnership was targeting Asia, – from which Rio Tinto flies work- in 2017. which was a huge potential market. ers to its mining operations in the They recovered slightly to “This Uluru day charter service Pilbara. 441,449 last year. really breaks new ground for us in PRIORITIES: Qantas and Alliance are competitors in the fly-in, fly-out market, but have different strategies in the leisure market. Photo: Gabriel Oliveira While most air traffic to Broome While Newman, Port Hedland capturing that market,” he said. originates in Perth, it also has links and Paraburdoo achieved strong “It shows what a bit of thinking to Darwin (via and other growth last year, they are both well outside the box can achieve.” airlines) and will soon have sched- short of their all-time peaks. Alliance’s charter service to uled services to the Pilbara via Other regional airports that Uluru has been launched just a few Aviar (see page 17). enjoyed strong growth last year months after Qantas scaled back This Uluru day charter service Broome is hoping international included Albany, Learmonth and its scheduled services between aviation will provide a further Kununurra. Perth and the Northern Territory. boost, with Singapore Airlines’ Looking at the state as a whole, This was despite Qantas rec- really breaks new ground for us in regional arm SilkAir holding trail Perth Airport is positive about the ognising increased demand for flights from its home base during outlook. flights to Uluru. capturing that market … it shows the past two years. It noted that Qantas, Virgin Aus- “Uluru is in more demand from Kalgoorlie-Boulder Airport has tralia, Qatar Airways, AirAsia, China international and interstate tourists enjoyed three years of strong Southern, Singapore Airlines and than we have seen in a long time,” what a bit of thinking outside the growth, with passenger numbers Cathay Pacific have all announced Qantas domestic CEO Andrew surging from 229,000 in 2015 to a capacity increases into the Perth David said. box can achieve - Kevin Brown record 289,000 last year. market during the past 18 months. Qantas responded by adding That broadly matches a pick-up A spokesperson said the airport direct flights to Uluru from Ade- In contrast to the growth in Kalgoorlie, Broome, Newman in the region’s mining sector, had been working with tourism laide and Darwin, on top of direct intrastate travel, interstate pas- and Port Hedland have led the led by gold, nickel and lithium bodies, the business sector and flights from Brisbane and Sydney. senger numbers through Perth increase in intrastate travel, projects. government to increase services Mr David said while there had Airport have barely changed over according to data for 2018 from the Airports in the Pilbara all shared and establish new routes. been strong demand for flights to the past six years, dipping frac- Bureau of Infrastructure, Transport in the increased activity last year “The launch of direct Tokyo flights the Northern Territory from some tionally to 5.9 million during the and Regional Economics. although their performance was by All Nippon Airways in September areas, demand was weaker from past 12 months. A record 415,892 passengers varied, and the longer-term trend is another vote of confidence in our Perth and . International passenger num- passed through Broome Interna- has been very different. city and state as a destination,” the Hence, Qantas cut the frequency bers have been a little more tional Airport last year. Passenger numbers through spokesperson said. of services from Perth to Darwin positive, increasing slightly to 4.4 That’s an increase of 12 per cent Neman were up 7.4 per cent, Port On a much smaller scale, and Alice Springs. It has never million during the past year. over the past two years and meant Hedland and Paraburdoo were up another notable new service is a offered a direct service to Uluru. FEATURE AVIATION

5years COMMITMENT TO WA ROUTES

AIRBORNE: Michael McConachy says Aviair will be carrying most of the financial risk on its new services. Photo: Landi Bradshaw

A privately owned WA has taken the lead on AVIAIR an innovative new service as the state government continues its review of regional aviation.

FLIES RIVATE airline Aviair has Aviair managing director and the new services were not simply launched a network of co-owner Michael McConachy a trial. Pinter-regional flights in the said the new services received an “We’ve committed to this for five Pilbara and Kimberley, offering a enthusiastic reception when they years.” IN WITH range of air travel options not pre- were announced at a Developing Mr McConachy said the new viously available. Northern Australia conference. services would be substantially Scheduled aviation services “There were cheers from the cheaper and much faster than within are crowd like I’ve never heard before,” flying via Perth, as many people REGIONAL almost exclusively between Perth Mr McConachy told Business currently did, as well as being and regional centres, with very News. safer and cheaper than driving. few options for people wanting to Mr McConachy said he had City of Karratha Mayor Peter travel between towns and cities. been working on the new services Long said getting inter-regional ROUTES Aviair already offers a range of for the past two-and-a-half years. flights off the ground had been charter services in northern WA, “There has been market failure a priority for a number of years. and will offer the new scheduled in aviation in the Pilbara and Kim- “After a number of years of services from mid August. berley for quite a while,” he said. hard work, this is a great example With support from the City of “We’re filling a gap between of progressive regional councils Karratha and Newman-based Shire charter services and larger working together with indus- of East Pilbara, it will offer ser- regional airlines.” try partners to achieve a shared vices between Karratha, Newman, While the new services were vision that benefits the entire Broome and Port Hedland. subsidised, Mr McConachy region,” Mr Long said. In addition, Rio Tinto has emphasised they were a commer- Shire of East Pilbara president committed support for the intro- cial decision. Lynne Craigie also welcomed duction of a route between “We’re taking the majority of the new services, saying the Karratha and Paraburdoo. the financial risk,” he said, adding collaborative approach to AVIATION FEATURE

ROUTE: Airnorth flies a daily service to Kununurra and Broome.

establishing the network had something that’s fundamentally It also has Perth-Kununurra “The committee received 106,000 total seats sold on its been very successful. important up here,” Mr McCo- and Perth-Darwin flights considerable evidence suggest- Esperance and Albany routes. Rio Tinto Port, Rail and Core nachy said. between May and October, which ing that fares on unregulated It has adopted a similar scheme Services managing director, Ivan With a fleet of 30 aircraft, mostly Airnorth said was in response to routes are unreasonably priced,” on its Carnarvon and Monkey Mia Vella, said the Paraburdoo Karra- with capacity for nine passengers, demand from both business and the committee’s 2017 report routes, which it took over in July tha route would make it easier for Aviair’s existing business includes leisure travellers during the busy concluded. 2018. businesses, the community and charters for mining and petroleum dry season. Nearly all designated RPT Partnering with Regional Rio’s workforce to travel within companies and scenic tours. Airnorth previously ran a routes in WA run from Perth and Express for these routes are the the region. It also operates a scheduled service between Karratha and therefore do not even cover the Shire of Carnarvon and the RAC, “This new service should also Regular Public Transport (RPT) Broome, but this was halted in inter-regional routes to be ser- which operates the Monkey Mia ensure greater employment service between Kununurra and 2017 after four years of operation, viced by Aviair. resort. opportunities for traditional Halls Creek and Balgo. as the route was not considered The WA parliamentary inquiry owners residing on the coast,” Mr This is one of seven regulated to be commercially viable given Partnerships evaluated Rex’s performance, Vella told Business News. RPT services subsidised by the the size of the aircraft. Partnerships between airlines along with schemes offered by Aviair is part of the Kimber- state government. Skippers operates a service and local councils (which typi- , Virgin Australia ley Experiences business run by The other regulated RPT between Broome, Fitzroy Cross- cally own local airports) are an and Qantas in regional WA. Mr McConachy and co-director services are run by ASX-listed ing and Halls Creek increasingly common practice “The committee did not receive Geoff Hamilton. company Regional Express and across regional WA. any negative feedback with Their Kununurra-based busi- Stan Quinlivan’s Skippers Aviation Policy review A leader in this respect is respect to Rex’s fares,” its 2017 ness includes sister company (see Partnerships). The new Aviair services have Regional Express, which has report stated. HeliSpirit, along with Freshwa- In addition, Aviair operates an been launched as the state numerous partnerships on the “There was little public outcry ter East Kimberley Apartments, unregulated RPT service between government continues its east coast and brought the model about airfares in Albany and Bungle Bungle Savannah Lodge Kununurra and the remote com- long-running review of regional to WA when it was awarded the Esperance, compared to other and Bungle Bungle Guided Tours. munity of Kalumburu that is not aviation, with Transport Minister Albany and Esperance routes in regional destinations visited by the Mr McConachy said the group subsidised. Rita Saffioti planning to release a 2015. committee.” employed about 200 people, with Darwin-based Airnorth and draft state aviation strategy later It has partnered with local coun- The committee also observed that almost all of these in the regions. Skywest are the only other air- this year. cils and Perth Airport on each of community sentiment was far more The group’s turnover had lines offering scheduled services This followed a review by a its RPT routes to offer discounted positive in markets like Esperance grown 500 per cent during the within northern WA. parliamentary committee, which ‘community fares’, and in some and Albany, where Rex proactively past three years. Airnorth’s Embraer 170 76-seat found widespread concern across cases more frequent services. engaged with the local community “We work closely with our jet flies daily to Kununurra and regional WA about the adequacy In 2018, Regional Express sold to explain cost drivers, route dynam- communities and its good to do Broome from its base at Darwin. and cost of aviation services. 24,000 community fares out of ics and service requirements. 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