Possible new (large) Regional Airline for Eastern Australia

[FL CH]

I've head whispers that there is a team looking at establishing a rather large Regional Airline operating 30+ seat turboprop aircraft along the east coast (including Tassie).

If the airline gets the go ahead, the first state they will operate in will be QLD due to the lack of competition on the coastal ports north of Brisbane since the demise of FWA.

[Pete Conrad]

FL CH, why would someone want to do this? talk about suicide!!! With EAA and REX doing the bulk of NSW regional flying I can tell you, there is no room for others especially given the fine line between profit and loss. To be a successful regional you need mainline feed I'm afraid, EAA has QF, REX now have Virgin.

Queensland would be a different kettle of fish. The most logical choice for a new QLD regional would be REX. They already have the alliance and throughfare setup with Virgin.

[Chocks Away]

Looks like Mt Cook Airlines are also utilizing the Trans Tasman open market then and we'll being seeing ATRs in Kiwi colours :p

[FL CH]

Peter,

Yes it is a risk, but hey it's their money. Plus Virgin don't own REX, so if a new regional was to start there is nothing stopping them from linking with Virgin along the same lines as REX. REX only has an on-carriage agreement with Virgin, until they get a codeshare argreement anything can happen.

There are routes in NSW that another regional operator could try, these include SYD-TMW, SYD-ARM, SYD-CFS and SYD-PMQ. Yes REX has tried all these routes and they didn't work, but in the past all these routes have had 2 operators on them.

I believe this new airline is looking at E120 or the Saab 340, with the Saab the favourite. Time will tell if they start. During the last 10 years there have been so many regional airlines come and go, it just shows how hard it is to make money flying to regional Australia.

Any comments Torres?

[Torres]

Nope. Guess everyone needs to make their own success or learn their own lesson. But the E120ER makes a lot of sense........

There certainly may be a "hole" on the Queensland coastal route, but most of the better commuter routes have been taken up by jets. Queensland has far more ports serviced by airline jets, than any other state - which stifles turbo prop commuter growth.

When I did it in 1987, I was granted a monopoly on a very large geographic area and a government subsidy, with a large captive audience, which later became the platform for a very successful move onto the coast.

I'd hate to be trying that again............ :(

[Balanced Moment]

I for one hope not. I am all for competition, but it has to be sustainable. There isn't a great deal left for another regional on the east coast - let alone a large one.

Two aspects of aviation now make it difficult for a regional to make money where there was once money to be had - compliance and the low fare mainline operators. Compliance from the perspective that CASA now expects all airlines to operate like a miniature Ansett or Qantas (If it hasn't struck you yet it will very soon) - and the low fare mainline operators through the indirect competition they bring.

Cases in point. Rocky - Virgin's entry almost killed Alliance. Coffs - Virgin's entry forced out Rex. Launceston - Virgin's entry sucked what little there was left out of the north west coast.

A regional without a robust oncarriage agreement is like bride without a groom - and unfortunately there isn't much left in that department any more. Good luck to anyone who tries. That's the beauty of competition. I hope they have deep pockets though.

[FL CH]

If the proceed they will be using the Saab340.
Pay will be based on GA award, ie less than the current Saab drivers at REX.
Maintenance will be carried out by a third party ie Hawkers.
HO will be in Sydney.
All ground staff will also be a third party, ie Aerocare.

[Torres]

"Pay will be based on GA award, ie less than the current Saab drivers at REX."

I see..........

Is that before - or after - either the Union rep or Industrial Inspector knocks on the door?


REGIONAL EXPRESS PILOTS AGREEMENT 2002 (http://www.wagenet.gov.au/Wagenet/Search/View.ASP?docid=183040&query=(AIRLINE%20PILOTS)&quickview=Y)

[jetstar21]

Right on (as always) Torres.

There is plenty of capacity on the Qld Coastal and Western routes and it would be a brave person who put their money into another aircraft type to parallel these routes.

One has to remember that the Q has DHC8-300s available to increase capacity when required and any challenger would have to match/better that.

Also, bread and butter runs have to be had in order to support trial periods on new runs.

All this and maintain the correct pay levels.

[Torres]

Jet, me old Mate! You have been quiet lately. :}

It would be a very game person who tried to establish a new operation on the coast. Western licensed/subsidised routes are closed.

Dash 8 - 100's won't cut the ice against the Q's more modern and faster fleet.

As I said in an earlier post:

"I'd hate to be trying that again............"

Indeed, despite possible "holes" on the coast, I would think success on the coast would be impossible without the western subsidised routes and interline support from a dominant trunk route operator. YC had both AN and QF support in 1987.

[gaunty]

jetstar21

Hiya, great to see you again, you wont be surprised to know I am still a chronic "latecomer":p

It's a well trodden road, will need huge cojones and an equally large capital investment.