BPA
24th Aug 2007, 01:23
Alliance rises from Flight West ashes
Steve Creedy | August 24, 2007
WHEN Brisbane's Alliance Airlines emerged from the wreckage of the last of the big family flyers in 2002, nobody expected to see it develop a nationwide presence within five years.
The former Flight West spent nine months in voluntary liquidation after colourful aviation figure Dennis Buchanan's plans buckled under the weight of the low dollar, high fuel prices and increased competition.
Its fleet consisted of just two Fokker 100s and an Embraer Basilia, and the plan was to reinvent it as an aviation services company.
Half a decade later, the booming resources industry means the airline's fleet stands at 11 100-seat Fokker 100s and three 56-seat F50s, with bases in Brisbane, Townsville, Perth and Adelaide.
It is looking to expand further if it can locate more suitable F100s.
"Unlike five years ago, these aircraft are incredibly hard to come by," managing director Scott McMillan said.
"Of 11 F100s, nine were bought from US Airways, so they are identical.
"Their configuration is well suited to Australia because the cargo holds are bigger than standard. All the avionics are in a rack just inside the main passenger door, and they are actually a slightly lighter operating weight than the other two we've got."
It is good to have aircraft that are identical, he said, "so the challenge we'll face down the line is to get ex-US Airways aircraft".
Mr McMillan admitted he did not expect the rebadged carrier to grow to its current size when he launched it five years ago. The feat was achieved in a measured way, he said. "We took a calculated risk back in 2003 when we bought six aircraft for which we had no guaranteed work.
"We've been able to bring aircraft online as opportunities have arisen. We put them through our heavy maintenance facility here in Brisbane and turned out a fully refurbished, overhauled aircraft.
"We can slow down or speed up that process depending on our customers' requirements. That has been one of our strengths."
Alliance has just taken delivery of its latest aircraft, an F50 and an F100. The F100 is heading to the maintenance shop and will be joined this month by another jet being prepared in the US for delivery.
This will give Alliance two F100s it can use ad hoc in Australia and the Asia-Pacific region, but the expectation is that they will be deployed for long-term contract work in the resources sector in South Australia, Queensland and Western Australia.
The F50 is in Melbourne being repainted ahead of its deployment at the end of next month, to join two others in South Australia.
The airline started operations in South Australia on July 2 with 36 weekly flights for BHP Billiton between Olympic Dam and Adelaide using two F50s. It has since won a contract to supply Oxiana's Prominent Hill project with 10 flights a week from Adelaide using the new F50.
The South Australian base now employs 31 people, which, as Mr McMillan noted, "is a pretty good set-up from a standing start on July 2". The Adelaide-Olympic Dam role is unusual for Alliance because it is a passenger service hosted on Virgin Blue's website.
Unlike another beneficiary of the resources boom, Perth's Skywest, Alliance concentrates on contract as well as ad hoc charter operations to government and commercial customers.
It also owns and maintains an F100 leased to Air Niugini and its Brisbane heavy maintenance operations are complemented by line maintenance operations in Perth, Adelaide and Townsville.
Like his counterparts at Skywest, Mr McMillan sees few dark clouds on the resources boom horizon.
The airline's customers are all increasing their workforces at the sites it services, boosting load factors as well as the number of flights, he said.
"Higher metal prices are good for our customers but there's always volatility in the resources industry and there will be a point in time when things start to go off the boil a bit," he said. "At that time a lot of our customers will need to fly in even more people to their sites to keep their revenues up.
"They're going to have to be producing more units of production for which they're getting a lightly reduced price."
The other advantage for Alliance, according to Mr McMillan, was that it dealt almost exclusively with top-shelf mining companies, rather than smaller operators at the riskier end of the market.
"They don't need 100-seat aircraft," he said. "That's not what we are designed to do, it's just the way it is.
"We've got our niche in the market and we're very happy to stay in it."
The Alliance boss does admit, however, that competition for fly-in, fly-out work has increased.
Skywest and National Jets Systems are strong competitors with big fleets of aircraft and others were always looking, he said.
Mining companies had become much more careful about contracts, he said.
"With the mining companies, when we're at tender, price is one issue," Mr McMillan said.
"There is a real focus on your ability to maintain the aircraft, your ability to cover scheduled maintenance with your own fleet.
"They even get down to the detail of how many spare engines you hold in your inventory and spare parts you're holding at each port. A delayed service for one of these companies is a whole heap of lost productivity.
"There is a whole heap of competition for labour between those mining companies, including some of our customers, so a reliable fly-in, fly-out operation is really now becoming quite an important human resources issue."
Source: The Australian
http://www.theaustralian.news.com.au/story/0,25197,22295239-23349,00.html
Steve Creedy | August 24, 2007
WHEN Brisbane's Alliance Airlines emerged from the wreckage of the last of the big family flyers in 2002, nobody expected to see it develop a nationwide presence within five years.
The former Flight West spent nine months in voluntary liquidation after colourful aviation figure Dennis Buchanan's plans buckled under the weight of the low dollar, high fuel prices and increased competition.
Its fleet consisted of just two Fokker 100s and an Embraer Basilia, and the plan was to reinvent it as an aviation services company.
Half a decade later, the booming resources industry means the airline's fleet stands at 11 100-seat Fokker 100s and three 56-seat F50s, with bases in Brisbane, Townsville, Perth and Adelaide.
It is looking to expand further if it can locate more suitable F100s.
"Unlike five years ago, these aircraft are incredibly hard to come by," managing director Scott McMillan said.
"Of 11 F100s, nine were bought from US Airways, so they are identical.
"Their configuration is well suited to Australia because the cargo holds are bigger than standard. All the avionics are in a rack just inside the main passenger door, and they are actually a slightly lighter operating weight than the other two we've got."
It is good to have aircraft that are identical, he said, "so the challenge we'll face down the line is to get ex-US Airways aircraft".
Mr McMillan admitted he did not expect the rebadged carrier to grow to its current size when he launched it five years ago. The feat was achieved in a measured way, he said. "We took a calculated risk back in 2003 when we bought six aircraft for which we had no guaranteed work.
"We've been able to bring aircraft online as opportunities have arisen. We put them through our heavy maintenance facility here in Brisbane and turned out a fully refurbished, overhauled aircraft.
"We can slow down or speed up that process depending on our customers' requirements. That has been one of our strengths."
Alliance has just taken delivery of its latest aircraft, an F50 and an F100. The F100 is heading to the maintenance shop and will be joined this month by another jet being prepared in the US for delivery.
This will give Alliance two F100s it can use ad hoc in Australia and the Asia-Pacific region, but the expectation is that they will be deployed for long-term contract work in the resources sector in South Australia, Queensland and Western Australia.
The F50 is in Melbourne being repainted ahead of its deployment at the end of next month, to join two others in South Australia.
The airline started operations in South Australia on July 2 with 36 weekly flights for BHP Billiton between Olympic Dam and Adelaide using two F50s. It has since won a contract to supply Oxiana's Prominent Hill project with 10 flights a week from Adelaide using the new F50.
The South Australian base now employs 31 people, which, as Mr McMillan noted, "is a pretty good set-up from a standing start on July 2". The Adelaide-Olympic Dam role is unusual for Alliance because it is a passenger service hosted on Virgin Blue's website.
Unlike another beneficiary of the resources boom, Perth's Skywest, Alliance concentrates on contract as well as ad hoc charter operations to government and commercial customers.
It also owns and maintains an F100 leased to Air Niugini and its Brisbane heavy maintenance operations are complemented by line maintenance operations in Perth, Adelaide and Townsville.
Like his counterparts at Skywest, Mr McMillan sees few dark clouds on the resources boom horizon.
The airline's customers are all increasing their workforces at the sites it services, boosting load factors as well as the number of flights, he said.
"Higher metal prices are good for our customers but there's always volatility in the resources industry and there will be a point in time when things start to go off the boil a bit," he said. "At that time a lot of our customers will need to fly in even more people to their sites to keep their revenues up.
"They're going to have to be producing more units of production for which they're getting a lightly reduced price."
The other advantage for Alliance, according to Mr McMillan, was that it dealt almost exclusively with top-shelf mining companies, rather than smaller operators at the riskier end of the market.
"They don't need 100-seat aircraft," he said. "That's not what we are designed to do, it's just the way it is.
"We've got our niche in the market and we're very happy to stay in it."
The Alliance boss does admit, however, that competition for fly-in, fly-out work has increased.
Skywest and National Jets Systems are strong competitors with big fleets of aircraft and others were always looking, he said.
Mining companies had become much more careful about contracts, he said.
"With the mining companies, when we're at tender, price is one issue," Mr McMillan said.
"There is a real focus on your ability to maintain the aircraft, your ability to cover scheduled maintenance with your own fleet.
"They even get down to the detail of how many spare engines you hold in your inventory and spare parts you're holding at each port. A delayed service for one of these companies is a whole heap of lost productivity.
"There is a whole heap of competition for labour between those mining companies, including some of our customers, so a reliable fly-in, fly-out operation is really now becoming quite an important human resources issue."
Source: The Australian
http://www.theaustralian.news.com.au/story/0,25197,22295239-23349,00.html