Tough business this aviation..

[TBM-Legend]

Writedowns push Alliance Aviation to first half statutory loss | Australian Aviation (http://australianaviation.com.au/2015/02/writedowns-push-alliance-aviation-to-first-half-statutory-loss/)

[bagthrower]

And what will happen if they lose the Olympic Dam F50 contract.... Word is that could be shut down any day

[wheels_down]

The future of these FIFO operations will be in the hands of Qantas and Virgin, whether it's partly or wholly owned operations (Just look at Skywest, Alliance etc..). Changes appear now also at Air North.

Strategic was a good example of a carrier who tried to chase its tail after losing contracts, was nothing but a disaster.

[Horatio Leafblower]

The problem is re-scaling the business quickly enough. You invest a lot of money in staff and equipment and capability and when the downturn comes, nobody knows how deep it will be.

Nobody wants to let people go or reduce the capability they built up, lest the phone rings and things improve. It's a gamble.

[DeltaT]

Yeah but it was devaluing the aircraft on the balance sheet that made it a loss, based upon the current market.

[bagthrower]

I have a feeling that Australia's F***** Too many tax's, red tape, and simply not enough population to ever have a secure base hence the continual boom bust that we are... And people scoffed at Jetgo recently for starting a AOC and charter company in the USA... Sounds like a fair spread of risk to me.. Its just a shame to see companies such as Air North, Rex and Similar to be sold out to multi National companies. the day of the small operator in Oz are numbered... Tell your kids to stay at school and become anything other than pilots or engineers....

[Nulli Secundus]

And people scoffed at Jetgo recently for starting a AOC and charter company in the USA... Sounds like a fair spread of risk to me.

Really? They launch a US charter op to spread risk? They'd only been operating for a month!

With respect, that's just nonsense. These guys refuse to market and sell their product. There's no director of marketing, there's no marketing dept., its mostly about operating and hoping people buy tickets. When that doesn't happen its announced the caused was anything but their own doing. Almost every announcement has been altered or cancelled.

As for the

Too many tax's, red tape, and simply not enough population to ever have a secure base

Really? Then why, as you say, are the multi-nationals buying in to Australian aviation businesses? I don't believe any of them are in the US starting small time charter outfits to hedge their risk here in Australia.

Most business people around the world would kill to have the opportunities we have in this country and yet we hear copious local whinging when foreigners come in to have a go.

Every era in aviation has had its challenges. In the 1960's Braniff, Continental and Texas International took Southwest to court in an attempt to shut them down. Southwest took them on, won and expanded. If you really want to be a success, you'll find a way.

Its far from game over in Australian small operator aviation but it may be argued there's not a reassuring depth of leadership or business acumen in Australian aviation management at present.

[framer]

I've been living outside of Australia since 2001.
From 2004-2011 I used to marvel every time I went back at the obvious excess of cash in Australia. The roading, the buildings, the new cars, ( every 25 year old tradie seemed to be driving an HSV ute) the fire-balls puffing into the night air from the Yarra outside our crew hotel, everywhere you looked there was money.
What happened? Did none of that get put away for a rainy day? Did no one see a day coming where the mining money would stop flowing in so readily?
Seriously ..... Did it all just get spent on fire-balls?

[Captain Sand Dune]

Australians in general don't do putting away for a rainy day. Australians seem to want everything now rather than saving up for whatever it is they desire. While the mining boom certainly has improved many people's cash flow, I reckon you're seeing a fair bit of debt as well.
A lot of young blokes mortgaged themselves to the nostrils on the strength of a FIFO job in WA to finance their MacMansions in the Northern suburbs of Perth, a couple of flash cars, a boat, jet ski and a Harley Davidson.
Saw the same thing when working in the Middle East.

[TBM-Legend]

Now we have even more mining drawdowns in Qld by Glencore [two mine near Isa and the 'Curry] and others so I guess the FIFO charter market here will tighten up a bit more. Moranbah, Cloncurry RPT will slow a bit as well.

Hopefully a new mine or two will appear to soak up the capacity.

http://www.abc.net.au/news/2015-10-09/glencore-slashes-queensland-jobs-northern-territory/6840242

[Compylot]

Hopefully a new mine or two will appear to soak up the capacity.
*Poof!

You wouldn't believe it but TWO new mines have just appeared in Queensland!

The Queensland Government is at a loss to explain exactly how and where these two mines appeared but Annastacia Palaszczuk is reported to be very happy.

"While their exact locations are still being determined, when they are pinpointed...I can assure you that FIFO operations will commence... providing a substantial economic benefit for all Queenslanders (and a few bogans from Western Australia)." she was quoted as saying....

[Sunfish]

Mining has always been an on again/off again business because the price of metal changes. For example, the old mines at Broken Hill are still in "care and maintenance" mode, not abandoned, in case the economics of lead and Zinc change favourably or there is a technical breakthrough that reduces extraction costs.