MEDIA RELEASE
Embargo until 10.00am CST, 15th November, 2004
AIRNORTH SUSPENDS FLIGHTS
between Darwin, Katherine, Tennant Creek
and Alice Springs
Airnorth announced today that from 5th January 2005 (incl), Airnorth flights operating between Darwin, Katherine, Tennant Creek and Alice Springs will be suspended indefinitely.
Airnorth have been negotiating with the Northern Territory Government for more than two years in an endeavour to arrive at a long-term solution for the route.“Losses for the past three years have exceeded $1M per annum on a fully costed basis and we see there being little opportunity for this result to be reversed without Government Support,” said Airnorth CEO, Michael Bridge.
Airnorth’s final submission to the Northern Territory Government two months ago involved the NT Government purchasing an additional 351 tickets over the next 12 months, an indirect subsidy of some $213,000.00. The NT Cabinet decided last week that they would not take up this offer and would look for other
operators to provide the service. After internally announcing services would be suspended from 1st December, the NT Government responded with a one-off offer of $52,000.00 to keep services going in December. The NT Government sought Expressions of Interest nationally earlier this year with Airnorth being the only respondent providing a priced response. “Other airline operators have reviewed our figures and passenger numbers and realise the problems in trying to make the service viable,” Mr Bridge said. He went on to say, “The $213,000.00 we asked for would have represented a contribution towards
budgeted losses of around $500,000.00 over the next twelve months, once overheads were removed, and we felt that it was an opportunity for the NT Government to share the burden and
deliver upon what we believe should be a community service obligation. Our decision to suspend services has not been taken lightly and with Airnorth’s landed revenue representing more than
90% of the revenue for Tennant Creek airport alone, we are mindful that there will be significant flow on effects for both communities.” “We will review the situation again in the first quarter of next year to see whether there is an
opportunity to reintroduce services during the Dry Season which historically fairs better than the Wet Season, although still not profitable,” Mr Bridge added.
The communities of Katherine and Tennant Creek are now added to a list of more than 100 regional communities in Australia that have lost air services in the last 15 years.
Airnorth has been the sole operator on the ‘Centre-run’ for more than 13 years, inheriting the service from Ansett NT after a NT Government tender in 1991. The service was originally daily
and has slowly reduced to three flights a week currently.
Capiteq Ltd, owners of Airnorth also own Airlines of South Australia (ASA) and Emu Airways (EMU) both based in South Australia. The three airlines have a significant geographical spread
throughout Australia as well as Indonesia and East Timor.
Together they employ more than 260 staff and are members of RegionalLink.
For further information please contact:
Andrew Dubyna
National Sales & Marketing Manager
Ph: 08 8234 3000
Mb: 0422 221037
E:
[email protected]
Neil Shea
Chief Operating Officer
Ph: 08 8234 3000
Mb: 0422 221060
E:
[email protected]