Skywest Jets Into Exmouth, Links Coral Coast To Kimberley

[topend3]

Media Release 2004-05-25


MEDIA RELEASE
25 May 2004

SKYWEST JETS INTO EXMOUTH, LINKS CORAL COAST TO KIMBERLEY

Skywest Airlines is launching a jet service between Perth and Exmouth in a move that significantly improves services to the Coral Coast, one of Western Australia's premier tourist destinations.

The jet service will also fly between Exmouth and Broome, providing vital tourist infrastructure and representing a major attraction for inbound tourism operators.

Skywest's new Coral Coast schedule will be effective from the beginning of June and will enable passengers to fly from Perth to Learmonth (the nearby airport servicing Exmouth) in one hour and forty five minutes..

The new service will operate on Thursday and Sundays, flying a 97 seater Fokker 100, with connecting flights to Broome. Daily Fokker 50 flights will continue on the other five days of the week - Monday through Wednesday, Fridays and Saturdays.

Skywest CEO Scott Henderson said the increased services offered multi destination opportunities in two of WA's important tourism regions.

"As part of our dedication to servicing regional WA, we are committed to bringing enhanced services to the North West," said Mr Henderson.

"WA has some of the most outstanding tourism attractions in the world but the reality is that tourists find it incredibly difficult to see them in a single itinerary.

"The introduction of the jet service is a major step forward in this regard and reinforces Skywest's belief in the Exmouth region as a premier tourist destination."

Skywest expects strong support for the jet flights, providing Exmouth with the opportunity to build further tourist traffic during its high season. The service will be introduced on a trial basis from 3 June 2004, and will run through until 31 October 2004.

Demand for the jet service will then be assessed and a decision will be made on the viability of continuing the Learmonth jet service.

Mr Henderson said that Skywest had worked closely with Planning and Infrastructure Minister Alannah MacTiernan and the State Government to develop air routes that benefited Western Australians and promoted tourism, especially with overseas visitors.

Mr Henderson said plans were being developed to offer packages aligned with holiday operators in both destinations.

Skydeals between Perth and Exmouth start at $199 one way and can be purchased on the Company's web site, www.skywest.com.au.

Skywest currently flies to 13 destinations and has recently signed an interline agreement with Emirates, the world's fastest-growing intercontinental airline.

The Emirates arrangement allows international travellers to fly for example from Munich to Exmouth , as well as a large range of other international destinations, on one ticket.

End of Press Release.

[GoNorth]

A bold move. I just can't see this working.

Anyone know how the Karratha/Port Hedland loads are going with Skywest?

[topend3]

loads are going better than expected on this one...

[cunninglinguist]

Which are ? ( approximately ).

It sems a little strange that Scotty is trying all the things that Ansett/QF link did over the years, and gave away.:confused:

[mr anderson]

"Mr Henderson said that Skywest had worked closely with Planning and Infrastructure Minister Alannah MacTiernan and the State Government to develop air routes that benefited Western Australians and promoted tourism, especially with overseas visitors."
I just hope that Skywest can make a go of it from the $$$ kickback from Gallop and Alannah without doing all its own money!!!
One thing that is for sure that Alanah would not know the first thing about what is best for Aviaton in WA. ITs just a shame other operators throughout the region were not givin the same pledge from the Labour Goverment that Skywest was able to secure!!
You have got to love politics hey!!!!

[topend3]

well at least they are giving this one a go, in the press release they say it is a trial till october 31, so i guess if the numbers don't add up they will can it. i would have to agree i am not sure they will get consistent loads to support the service, certainly between lea-per but not between lea-bme-lea.

load factor at the moment on the per-kta-phe runs i am told from a source is around about 50-60%.

[geoffrey thomas]

Mr Anderson;
Quite extraordinary comments i must say. Perhaps a few facts might help here.

1. Alanah and Geoff Gallop have probably got a far better handle on WA aviation than most in government in recent years.
2. Alanah gets advise from a highly respected team of people and that advise is backed up by some excellent reports into what works in WA.
3. I would hardly think that Skywest think they are getting much benefit from the State Government of late. (Geraldton/Shark Bay)
4. Other operators will get a crack at the other monoply routes when they come up for renewal and tender.

I think given all the parameters realting to WA's vast distances and small population the government has got it right in trying to build a viable and sustainable airline system.
GT

[phat boy]

Which local/state gov't spanker started calling the place "The Coral Coast" to try to attract more tourism $$$ ?

[OverRun]

It's a bold move all right. The problem is that air services have always been a bit like the chicken and egg situation. Need the traffic to justify the larger planes. Without the larger planes, the fares are too high to generate the traffic and the flight attractiveness is too low to switch many people across to air.

The F100 flights are a leap of faith and I for one hope they succeed. And despite my free market leanings, I think this is one time when it is a big 'well done' to the monopoly licensing system that the WA government has applied on thin routes. This gives the sort of financial stability that makes this type of initiative possible. On the busy routes, where the traffic can support several operators, the WA government has opened up competition, which makes clear economic sense and gladdens my free market heart. But for the rest of WA, I'm with GT on this one I think given all the parameters relating to WA's vast distances and small population the government has got it right in trying to build a viable and sustainable airline system

[Capn Bloggs]

Overun,
Stability may be good for the punters, but when one operator runs a monopoly (and therefore guaranteed cash) on some routes AND competes on others, that's unfair. They are using their protected profits to defeat competitors on the free-for-all routes. Example: the goldfields. Companies can't get into LNO because of the rules, but the incumbent is now attempting to expand elsewhere in the area, using their protected position to fund expansion. That's a little unfair. On routes that cannot sustain a bloodbath, perhaps what is needed is a "two-airline" policy (now there's a blast from the past...) to keep healthy competition going but not to the detriment of service to the punters.

[topend3]

good comments overun, fully agree with your sentiments. we also have to remember that were competition to be introduced on some of these long, thin routes such as carnarvon, exmouth etc, it may indeed be to the detriment of the public.

at present, skywest provides these people with high levels of frequency, service and affordability (more recently even more so with the introduction of cheap e-fares). better to have one operator providing what the people of these towns want rather than two operators slugging it out and neither running a profitable service.

whilst i do not support the current government, i do feel their aviation policy does make sense. and they have had input from the experts at asia pacific centre for aviation, who commisioned a report a couple of years ago, makes for interesting reading and is on the department of p & i website. it highlights those routes where having competition can be to the benefit of the travelling public, and geraldton is one of those, a town who now has two rpt services, xr and skippers.

GT- do you know when the other turboprop routes (eg-alh and epr) come up for review? i have asked the dpi but haven't had a response as yet, was thinking of putting in a tender.

[Icarus2001]

Mr Geoffrey Thomas

Alanah gets advise from a highly respected team of people and that advise is backed up by some excellent reports into what works in WA.

1. Highly respected by who?

2. Advice is not spelt advise but then you are only a journalist.:rolleyes:


Allan Bond was highly respected and ended up in prison. :ok:

[Q-Tee]

Icarus,

'Alan Bond' is not spelt 'Allan Bond' .... but then you are only a pilot :p


(Sorry mate, you left yourself wide open there :O )

[cunninglinguist]

uhh, sorry GT, I'm a little confused, " little help from the state government " :confused:
Since when did deregulation mean that one operator ( in this case Skywest ) can fly on any route they like ( sans closed contracts, obviously ) and everyone else is restricted ?
That should then read: " the state government has been great for skywest aviation in WA " not all aviation.

If stopping other operators from flying on ( in your words ) " monopoly " routes is not help, what is ?

[Uncle Festa]

GT

You've stated that "Alanah gets advise (sic) from a highly respected team of people and that advise (sic) is backed up by some excellent reports into what works in WA."

Two questions:

Who are the members of "that highly respected team"?

Where can the public source those "excellent reports into what works in WA"?

:ok:

[geoffrey thomas]

Sorry for the delay in my reply as I am away in the US.

The State Government’s policy reflects a very comprehensive report into air services in WA which said that routes under 50,000 pax should be a sole operator to bring a measure of stability. This however does have shortcomings as under.

1. There is no incentive for the sole opertor to grow the market past 50,000.
2. And this policy may protect the inefficient or those who do not have the interests of the state at heart.

The government has recognized these problems and thus will not just renew a monopoly position of any airline but will put the routes out to tender, probably as a package.

Skywest’s protection on some routes, (which comes up for review later this year) and its expansion on others, has caused concern in Government circles as it goes against national competition policy.

Qantas has already reacted by withdrawing from the FF program but at the same time Skywest is taking the plunge on the “coral coast route” which is bold, and to be applauded. It is the sort of thing the state needs.

Icarus2001, I for one never respected Alan Bond or even Allan Bond…I knew them both too well for that.

Best GT

[Wirraway]

Thurs "The Australian"


Move on Skywest chairman
By Steve Creedy, Aviation writer
June 03, 2004

THE Singaporean investors behind an $11 million takeover bid for Perth's Skywest Airlines are seeking to replace the carrier's chairman.

Skywest received a notice from CaptiveVision Capital (CVC) on Friday requisitioning a shareholders meeting to consider a range of resolutions, including a proposal to remove chairman Pat Ryan from the board.

The unlisted Skywest said yesterday its board did not support the resolution and it was seeking legal advice on the matter.

It said it would respond to the CVC document with a target statement and advised shareholders to take no action, pending its formal response.

CVC owns 19.6 per cent of Skywest and is offering 20c a share for the rest.

The Skywest board had referred the bid to the Takeovers Panel, alleging breaches of the Corporations Act and seeking an order boosting the offer from 20c to 22c.

But the panel ruled on Tuesday that CVC was entitled to proceed with the bid, provided it finalise financial arrangements and prepare a supplementary bidder's statement that must first be submitted to the panel for review.

The CVC bid comes as Skywest is moving to list on the Australian Stock Exchange and Mr Ryan said plans were well advanced.

"The board will continue to manage the ASX listing and takeover processes simultaneously," he said.

=========================================

[Icarus2001]

Q-Tee Oh you mean that Alan Bond. I was talking about Allan Bond from Geelong who got locked up for fiddling his taxes.:ok:

Gosh and I thought I had made a mistake.:rolleyes:

Mr Thomas in true political style you avoided my question and also Uncle Festas'.

Who are these highly respected people that advise (sic) the Minister for P & I (and shiraz).?

[OverRun]

Icarus 2001 and Uncle Festa,

The highly respected people are led by Nick Belyea (A/Director Transport Policy) who is indeed very respected by the aviation professionals that work with him. One group of opinion [including mine] is that Nick is the running the best show that WA has seen since the 1980s when JT was running it.

The reports are by Tourism Futures International and the Centre for Asia Pacific Aviation. Again, for what its worth, my own opinion is that if I could write a report as good as theirs every time, I would be well pleased with myself. As it is, I think they've done this one very well.

The reports are on the DPI website
http://www.dpi.wa.gov.au/aviation/index.html

Scan down that webpage and find the links to the reports. The page includes:
"New Air Services Policy for Western Australia"
Following the collapse of Ansett in September 2001, the Government of Western Australia moved to review all intrastate air services to ensure that regional centres and communities in Western Australia would continue to have sustainable and viable air services.

The Department for Planning and Infrastructure commissioned aviation industry consultants, to undertake an independent analysis of intrastate air services in Western Australia.

Central to the report's recommendations is that the Government adopt a more active regulatory regime to support scheduled air services on non-jet routes.

The results of the review are available as a comprehensive Technical Report (PDF 2322KB) and an Overview Report (PDF 386KB)
IMHO, download and read the Technical Report closely. If you want to get a good understanding of the business of regional airline policy and economics, then this report is first class.

In this bizarre 'Dicked by Smith' world of Australian aviation, let me make the necessary statement for the record that I have no vested interest in the reports - I don't know either of Tourism Futures International or the Centre for Asia Pacific Aviation, and I have no business or interest in Skywest or in anything to do with the long thin routes that are being discussed, and I have no business or profit from the monopoly and I don't work for the WA government.

As a general comment, and not aimed at any person here, don't come into my postgraduate classroom on airline economics and expect to pass the course without demonstrating application of knowledge, computation and rigour. If you wanted to tackle the issues of the Skywest monopoly or the regional airline policies of the WA government from a professional perspective, you could then start by doing the computation of the fare structure and yield management for these thin routes (such as Albany or Esperance). Post them here in PPRUNE. That would give the facts and numbers to show if current Skywest fare/price class structure is reasonable or overpriced.

For those of you that can't wait for the answer, and since I have run the numbers, let me share them with you - their fares are, IMHO, reasonable or better then reasonable. Now Icarus2001, pass the shiraz.

[Icarus2001]

Your cup doth indeed OverRun sir. Good post. Thanks for that I will have a read. I do enjoy seeing a job well done. Seriously.

I am sick of reading "expert" reports by highly paid "consultants", who are only consulting because no one would give them a full time job, only to find huge factual errors in the report.

So how does "protecting" routes sit with National Competition Policy? Surely the state government would not have a leg to stand on if it was challenged? Obviously a good way to lose millions would be to compete with Skywest I know, but in principle anyway.

[OverRun]

Icarus2001,

Thanks for those kind words. I think that "protecting" routes sits badly with National Competition Policy. I think that "protecting" routes is a bad thing from a free market perspective. I'm by nature a free marketeer. I don't like monopolies. Despite all my philosophical negatives, I think that Nick has engendered the right aviation policy for WA. The market on the THIN ROUTES won't support competition, and opening it up to competition will be destructive and lead to smaller aircraft which necessarily cost more per seat-km and will lead to higher fares. That's why I reckon he is doing well because it takes courage to do it like he has done, rather than do it PC.

One intellectual free marketeer problem is that the WA policy for THIN ROUTES works almost too well. At least WA still has a policy of opening up busy routes to competition. The WA mix of air route policies is [IMHO] clever, advanced, subtle, efficient, and socially aware. Anecdotally, the Canadians were floored by them [in a positive sense] as a solution to some of the thin routes they have.

The current THIN ROUTE policy gives WA reasonable (nay, good) aircraft to all sorts of destinations, and as my calculations show, at a very reasonable fare. The fact that it is Skywest who benefits is neither here nor there. Someone has to do it well and make a deserved profit, and they happen to be it. It might be anyone else after the 2005 tender, and good luck to them too.

I've recently run the airline economics for the Skywest routes for a different project (sorry Skywest, I forgot to tell you about that). The best of their routes in a competitive position can support only a 30 seater and the rest can support a Metro. The fact that Skywest have been able to run big comfortable (almost luxurious) 50 seat aircraft (incidentally did I mention that I love big comfortable aircraft) is a very big bonus. One which advantages rural WA. And one that leads me to endorse the monopolistic air policies on thin routes. I would like the chance to give the same two-bobs worth to the National Competition Policy people! I can remember growing up in aviation when there were only CFS Queenairs, equipped without a toilet, cruising at 7,500', on the Esperance run. Have you tried to hold a pee in for the two hours it took them to fly the route?

I think we've moved a long way forward from that aircraft and I give credit to the WA policy for thin routes (incidentally did I mention that I love big comfortable aircraft).

[jetpipe]

Overrun

You have sumed up the problem facing every regional port in Australia.
You either have a single provider with some form of price control from the Government - regulation. Or you have competiton and the customers gets a a short term price war.
Once the battle is finished there will only be one operator left, but they will have lost so much money in the fight that the prices will be higher then the regulated past. This is not an anti competitive stance merely but a reality for routes that are long and thin. The average turbo prop sector in WA is over 400Km's long and has a very small population on the end. For competition to work you need people both ends not one, just look at the Ryanair model. Whilst this might not be a 737 run the principles are the same, you need to have a certain volume of people to get the market flowing.

The other interseting point is the cost per ASK for a metro compared to a Braz and then an F50. With a metro on the route there is no chance of deep discounts unless the plane is full and no YMS is going to allocate a discount seat on a full plane.

So the Governemnt have a difficult job - regulate and be branded un competitive but services will remain or deregulate and watch the fight begin.

It will be interesting to see how this all works out next year.

[topend3]

i wrote a letter to alannah's office enquiring when the routes are up for review, here was the response, pretty vague...



SKYWEST NETWORK
The Minister for Planning and Infrastructure, Hon Alannah MacTiernan MLA, has asked me to thank you for your correspondence of 13 May 2004 regarding the Skywest network, and to reply on her behalf.
In 2002, in the wake of the collapse of Ansett, the Government provided Skywest with a two-year licence to operate non-jet air services between Perth and a number of key regional centres. The Government recently commissioned an independent review of the intrastate non-jet routes in consultation with the WA aviation industry and regional communities to determine what action should be taken in the longer term.
The Government has accepted the review’s findings that there is insufficient demand to introduce full competition into the non-jet air routes in WA. On that basis, it has been decided to undertake a competitive tender process to select airlines to commence services when Skywest’s current licence expires. It is believed that this represents the best model to ensure that regional communities continue to receive a viable and efficient air service that meets their needs.
Yours sincerely

Signed on 4 June 2004
ROB GILES
CHIEF OF STAFF

[cunninglinguist]

Really got the finger on the pulse, have'nt you Alannah.

Let me start this with " I have nothing against Skywest ! "

However, what constitutes a " thin route " ? ( is it Kate Moss;) )
Airlink operated to KA and PD for years, with crap load factors, that bad they actually ended up pulling out of PD.
Now, with the demise of Ansett, they are getting good loads on both those ports ( along with QF on KA ).
My point however is : another operator eg. Skywest on those routes, will necessitate either a) a reduction of flights or b) excepting smaller loads for the existing operator ( in this case QF )
So what is the difference between that and the Geraldton/Esperance situation ?? I am led to believe that Skywest have quite a few flights to both of those ports every day, and enjoy little, if no, competition.
So it is absolute crap that those places won't support 2 operators, it would mean that one of those operators ( Skywest ) would be making less money, if thats not protection of an airline , what is ?

Apart from BRM and KG, and maybe KA, there are very few ( if any ) routes in WA that will support 2 jet operators ( profitably )
So where is the protection for the operator on those other routes ??

[topend3]

you will actually find cunninlinguist that the geraldton route actually has a reasonable degree of competition.

skippers now schedule 7 return services a week with at least one return service each day, including services that continue through to Shark Bay.

media release below shows recent changes to geraldton air services...

The Hon. Alannah MacTiernan MLA
Minister for Planning and Infrastructure

Statement Released: 27-Apr-2004
Portfolio: Planning and Infrastructure

Changes to air services for Geraldton


27/4/04

Planning and Infrastructure Minister Alannah MacTiernan today announced changes to air services to Geraldton and other ports effective May 3, 2004.

Skippers Aviation will be permitted two additional Perth-Geraldton-Perth services on Wednesday mornings and afternoons and a revised service from Perth to Shark Bay via Geraldton and return on Saturdays.

Skywest Airlines will reinstate a through-service from Carnarvon to Perth via Geraldton on Friday afternoons.

"The State Government has been closely watching the competitive situation with air services to Geraldton, mindful of the importance that both airlines can survive in the marketplace," Ms MacTiernan said.

"The community is always enthusiastic about an increase in services.

"However, the State Government has to be mindful that service levels are sustainable. It has considered the impact on the viability of other services in the Skywest network, particularly those that link with Geraldton.

"Regional air services are important throughout Western Australia and although the regional airline industry in Australia continues to battle in difficult times, this Government has taken a measured approach to ensure service levels are commercially realistic."

Geraldton services will be kept under continual review including the possibility of future jet services between Perth-Geraldton and other ports further north in the Skywest network.

Security aspects need to be considered. The Government will do all it can to meet Federal security requirements and to minimise the associated costs on air travellers.

Minister's office: 9213 6400

[topend3]

and this....

Media Release - 9th June 2003

SKIPPERS OFFERS $49 ONLINE
SPECIAL TO THE CORAL COAST


Skippers has today announced the release of 1000 discount seats across its range of destinations within Western Australia’s Coral Coast. Fares start from an incredible $49 oneway to Geraldton.

This fantastic offer commences on Wednesday 9th June 2004 and applies to online bookings only, for travel up to and including 31st December 2004.

Discount seats will be available on flights to and from Geraldton, Kalbarri & Monkey Mia on a “first come first served” basis and are subject to special terms and conditions.

Skippers Chief Executive Officer, Rob Swann, said that “The introduction of these fares to the Coral Coast service is expected to draw many first time visitors keen to learn more about this world heritage region.”

“The Coral Coast provides an ideal getaway destination for first time visitors to experience the fantastic attractions of Kalbarri, Geraldton or Monkey Mia. These fares offer a cost effective alternative to driving and are expected to provide a welcome boost to tourist numbers visiting this remarkable region.”