WA Intrastate Air Services Review
Surely we are losing sight of the forest for the trees?
The aim of regulating RPT routes is to provide an good quality, reasonably priced service for a community whose population would not normally support/sustain such a service, at no direct cost to the taxpayer, in the form of subsidies to the operator etc....
How many profiable routes are needed to be serviced by the operator to compensate for the loss made on an unprofitable route such as Kalbarri? (bearing in mind that geraldton is open to limited competion)
Could the system work if the profitable routes were diluted to a greater extent and shared out amoungst local operators?
Is the state government putting enough restrictions/requirements on the current operators re aircraft type, fare structure, and frequency
The aim of regulating RPT routes is to provide an good quality, reasonably priced service for a community whose population would not normally support/sustain such a service, at no direct cost to the taxpayer, in the form of subsidies to the operator etc....
How many profiable routes are needed to be serviced by the operator to compensate for the loss made on an unprofitable route such as Kalbarri? (bearing in mind that geraldton is open to limited competion)
Could the system work if the profitable routes were diluted to a greater extent and shared out amoungst local operators?
Is the state government putting enough restrictions/requirements on the current operators re aircraft type, fare structure, and frequency
Another advantage of partial regulation is for the government to requirement cross subsidisation of routes eg We will give you a free run on Geraldton IF you maintain a service to Leonora.
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Avanti,
From what I've heard the government puts quite alot of restrictions on Skywest re fare structures and frequency. Basically any change of schedule or an increase in fares has to be approved by the government.
From what I've heard the government puts quite alot of restrictions on Skywest re fare structures and frequency. Basically any change of schedule or an increase in fares has to be approved by the government.
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You can't win.
When Skippers did the run to Kalbarri/Monkey Mia via Geraldton, the plane was too small, it didn't run often enough and you couldn't fit surfboards/scuba gear/fishing rods in the hold. Then they put the Dash on the route and everyone said the fares were too expensive ($99 one way on the net... not too bad I would have thought, beats driving?)
Then XR give it a crack, now everyone's supposedly bribing each other with trips and dinners... maybe it's just a reflection of what the public prefer. As someone who has in the past worked for both operators, the majority of comments by the punters seems to support the fact that they prefer XR hands down. Maybe that's just because of the alternative they used to have.
Would be interesting to see what would happen if Virgin ran E-jets in there. Too expensive again I suppose!
When Skippers did the run to Kalbarri/Monkey Mia via Geraldton, the plane was too small, it didn't run often enough and you couldn't fit surfboards/scuba gear/fishing rods in the hold. Then they put the Dash on the route and everyone said the fares were too expensive ($99 one way on the net... not too bad I would have thought, beats driving?)
Then XR give it a crack, now everyone's supposedly bribing each other with trips and dinners... maybe it's just a reflection of what the public prefer. As someone who has in the past worked for both operators, the majority of comments by the punters seems to support the fact that they prefer XR hands down. Maybe that's just because of the alternative they used to have.
Would be interesting to see what would happen if Virgin ran E-jets in there. Too expensive again I suppose!
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XRLent 100..
Whilst I can agree that all should be fair in each tender the core issue I have is that the Govt tendered RPT routes are not held to account like a normal mining contract.
This is because the contract is not let by the customer.
After all do both incumbent operators operate as per their tenders from over three years ago? I think not.
What hapened to Geraldton being serviced by both carriers, why is Learmonth a regulated turboprop route but servcied with a jet etc.
So if this was a normal contract and the customer didnt like it or they decided to change equipement they may go back to the market and see.
On another point how much does it cost to get press like in the West yesterday? That has got to be the most biased view on regulation I have seen in a while.
You must be worried that your all going to end up flying Navajos to Albany again, or even worse Metros
Whilst I can agree that all should be fair in each tender the core issue I have is that the Govt tendered RPT routes are not held to account like a normal mining contract.
This is because the contract is not let by the customer.
After all do both incumbent operators operate as per their tenders from over three years ago? I think not.
What hapened to Geraldton being serviced by both carriers, why is Learmonth a regulated turboprop route but servcied with a jet etc.
So if this was a normal contract and the customer didnt like it or they decided to change equipement they may go back to the market and see.
On another point how much does it cost to get press like in the West yesterday? That has got to be the most biased view on regulation I have seen in a while.
You must be worried that your all going to end up flying Navajos to Albany again, or even worse Metros
Jetpipe, I think you will find that the reason two operators are not servicing Geraldton is that Skippers pulled out due to it not being sustainable. If Geraldton is totally de-regulated, as appears possible, you can only imagine how two jet operators, DJ and XR for example, could make it viable.
At present I believe Geraldton is still open to limited competition.
I would have thought Skywest got approval to introduce F100's to Learmonth, plus the punters would have no doubt supported this move. In any future network I would not be surprised if Learmonth went the way of the other jet routes in WA and was totally de-regulated. This may allow some tourism boost if Virgin wanted to fly there, for example, with E-Jets.
The outcome of all this should be fascinating, with the Government sitting on the report and needing to make a decision sooner rather than later to provide some certainty moving forward.
The larger turboprop ports such as Albany could surely support something larger than a Navajo or a Metro I would have thought.
At present I believe Geraldton is still open to limited competition.
I would have thought Skywest got approval to introduce F100's to Learmonth, plus the punters would have no doubt supported this move. In any future network I would not be surprised if Learmonth went the way of the other jet routes in WA and was totally de-regulated. This may allow some tourism boost if Virgin wanted to fly there, for example, with E-Jets.
The outcome of all this should be fascinating, with the Government sitting on the report and needing to make a decision sooner rather than later to provide some certainty moving forward.
The larger turboprop ports such as Albany could surely support something larger than a Navajo or a Metro I would have thought.
Thread Starter
As per my original post, Learmonth is a regulated turboprop route with a captive audience of mining company traffic. The mining users don't like being forced onto RPT jets at RPT ticket costs and timing when the route protection is for turboprops. They want to charter aircraft when required and can't do so.
Last edited by flyingfox; 26th Apr 2009 at 11:16. Reason: redundant word
All this talk of deregulation just prompts the uninformed to expect 5* service for a marginal location. Take our 'leaders' down here - demanding a pure jet service, as well as deregulation - on a run which seems a good fit for the F50.
I like the old Fokker - it's solid, and reasonably roomy. Plus - it does 2, sometimes 3, services per day. I'm all for an 'affordable' service - not wishlist stuff!
It must be something in the good old Aussie psyche - always wanting more 'competition' so the prices will be driven lower. Inevitably, it becomes unprofitable for everyone - and soon there's no RPT service at all.
happy days,
I like the old Fokker - it's solid, and reasonably roomy. Plus - it does 2, sometimes 3, services per day. I'm all for an 'affordable' service - not wishlist stuff!
It must be something in the good old Aussie psyche - always wanting more 'competition' so the prices will be driven lower. Inevitably, it becomes unprofitable for everyone - and soon there's no RPT service at all.
happy days,
Prof. Airport Engineer
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I pulled out the report on the Review and Assessment of the Effectiveness of Air Services in Western Australia done in 2002 by TFI in preparation for the last round of regulation (it’s a very good report) to see if there were any gems that could be applied to this round of regulation. I found a classic at the start of section 7.3 of the technical report:
and from section 1 of the main report
Sounds pretty familiar stuff to us in 2009.
Back in 2002, the report noted
And I don't think anything has changed since 2002 in terms of our market conditions:
It makes me wonder why choose to go for deregulation now? What has now emerged to justify it? Has the airline system suddenly become less in turmoil?
Internationally, the airline system is in turmoil
Aviation worldwide is experiencing volatility. This is obvious in depressed travel figures and distressed airlines.
Back in 2002, the report noted
There is limited scope for competition on regional routes other than those serviced by jet aircraft. Even there, current operations are likely to be under some financial stress and any foreseeable pick-up in demand is unlikely to be sufficient to encourage or sustain competition.
Three features stand out when considering the nature of demand.
1. The absence of large regional centres and the focus on Perth.
2. The significance of mining as the foundation for air services development in WA.
3. The large seasonal variations in the major tourism routes within WA
1. The absence of large regional centres and the focus on Perth.
2. The significance of mining as the foundation for air services development in WA.
3. The large seasonal variations in the major tourism routes within WA
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I don't know why people automatically assume that just because you open a route up to competition that it will make it unsustainable for everyone and services will cease. If the market is allowed to open up then you will most likely see on some (but not all) routes a second airline.
In economics they call this a duopoly and so long as the market can sustain two players then both players will charge the same price for the service. If one increases the price, then the other will also as they want to maximise profit. If one lowers price then the will also as they also want to maximise profit.
Both airlines can be profitable in a duopoly. If there is 2 airlines on some of these routes then isn't that better for the consumer? I like to think so as it means we will get a choice in terms of schedules and other services. Not to mention that with greater capacity, the smaller towns of WA will be more accessible to tourists.
I am not sure how long WA Govt has protected these routes for but if they have never opened them up to competition, now is the time to do it. Give it a try. Governments have never been good in the past at running monoploy's, why is this one any different?
In economics they call this a duopoly and so long as the market can sustain two players then both players will charge the same price for the service. If one increases the price, then the other will also as they want to maximise profit. If one lowers price then the will also as they also want to maximise profit.
Both airlines can be profitable in a duopoly. If there is 2 airlines on some of these routes then isn't that better for the consumer? I like to think so as it means we will get a choice in terms of schedules and other services. Not to mention that with greater capacity, the smaller towns of WA will be more accessible to tourists.
I am not sure how long WA Govt has protected these routes for but if they have never opened them up to competition, now is the time to do it. Give it a try. Governments have never been good in the past at running monoploy's, why is this one any different?
I don't know why people automatically assume that just because you open a route up to competition that it will make it unsustainable for everyone and services will cease.
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No doubt SkyWest will remain the sheltered workshop that it has always been. Funny how they cry foul over the possibility of deregulation, but are happy to cut the guts out of the FIFO sector.
It must be great for these hypocrites to have the state government as a sugar daddy!!!
It must be great for these hypocrites to have the state government as a sugar daddy!!!
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Hoofharted
Iam with you Sky West can cut the bottom out of the FIFO market. and then get the RPT market to support it and then cry foul when the government want to deregulate the services to make it more cost effective and the burden for tax payers.
Iam with you Sky West can cut the bottom out of the FIFO market. and then get the RPT market to support it and then cry foul when the government want to deregulate the services to make it more cost effective and the burden for tax payers.
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In the larger scheme of things, 40million people is the world requirement for a sustainable airline system to stand alone.
So where does that leave WA?
In 1968, MMA was subsidised to the tune of $1000.00 per day to operate DC-3s in the so called station runs in the Murcheson, Pilbara, Kimberly and NT. End of subsidy, end of DC-3s and in my case my job for a while.
The years of the "Two Airline Policy" saw many places get a service above and beyond the sustainability of that port in real terms, being subsidised by the Trunk Routs.
As far as WA is concerned, the change is too many on the trunk routes, limited revenue from the Kalbarri's and Shark Bays so a "subsidised/solo operator" is in real terms one of the ways to give a service that is perceived to be needed. Better roads, FIFO and smaller workforces than in the earlier times have reduced the RPT revenue base of WA operators.
There are probably too many in the Aviation pie of WA, we realy are a flyspec on the map in a strictly aviation term of reference, but if you are a player it is a world you work in regardless.
Skywest have as good a service as most, a cost effective even if old F-50s and has pulled itself up from the Ansett disaster by a lot of hard yards, the replacement of the equipment is of course another matter, Jets are not the answer in all ports they service, forbidden in some so????? crystal ball dept I feel.
So where does that leave WA?
In 1968, MMA was subsidised to the tune of $1000.00 per day to operate DC-3s in the so called station runs in the Murcheson, Pilbara, Kimberly and NT. End of subsidy, end of DC-3s and in my case my job for a while.
The years of the "Two Airline Policy" saw many places get a service above and beyond the sustainability of that port in real terms, being subsidised by the Trunk Routs.
As far as WA is concerned, the change is too many on the trunk routes, limited revenue from the Kalbarri's and Shark Bays so a "subsidised/solo operator" is in real terms one of the ways to give a service that is perceived to be needed. Better roads, FIFO and smaller workforces than in the earlier times have reduced the RPT revenue base of WA operators.
There are probably too many in the Aviation pie of WA, we realy are a flyspec on the map in a strictly aviation term of reference, but if you are a player it is a world you work in regardless.
Skywest have as good a service as most, a cost effective even if old F-50s and has pulled itself up from the Ansett disaster by a lot of hard yards, the replacement of the equipment is of course another matter, Jets are not the answer in all ports they service, forbidden in some so????? crystal ball dept I feel.
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How much of a subsidy do they really get??
Surely it can't be that much.
And is a air service a must have or just a want?
Hopefully nobody loses their service but one has to wonder with the current economic climate will the subsidy be juicy enough to keep things going if travel falls. Surley you need at least a 50% load?
Surely it can't be that much.
And is a air service a must have or just a want?
Hopefully nobody loses their service but one has to wonder with the current economic climate will the subsidy be juicy enough to keep things going if travel falls. Surley you need at least a 50% load?
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There is no subsidy and that's the point, whoever wins the contract takes all the risk.
You guys/gals are missing the point. This is a tender that any one can apply for. Skywest were just the most competative last time round.
Skywest would be stupid to have undercut themselves to win the mining contracts based purely on having the RPT contract. As any company would be. The same applies for any other charter airline. If they win one major contract that makes good money and then decide to use the profits to subsidise another less profitable one then they take the risk.
You guys/gals are missing the point. This is a tender that any one can apply for. Skywest were just the most competative last time round.
Skywest would be stupid to have undercut themselves to win the mining contracts based purely on having the RPT contract. As any company would be. The same applies for any other charter airline. If they win one major contract that makes good money and then decide to use the profits to subsidise another less profitable one then they take the risk.
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Ah OK then XRlent100
Well thats fine, no subsidy, that seems fair.
I would think that the saying cheapest is NOT always best applies here.
ie surley a long established operator like skyw**t that has provided a good service over a long period would take some beating.
There is no point cherry picking the best routes and leaving the others to rot. That is why the routes are packaged together in one tender.
Well thats fine, no subsidy, that seems fair.
I would think that the saying cheapest is NOT always best applies here.
ie surley a long established operator like skyw**t that has provided a good service over a long period would take some beating.
There is no point cherry picking the best routes and leaving the others to rot. That is why the routes are packaged together in one tender.
You guys/gals are missing the point. This is a tender that any one can apply for. Skywest were just the most competative last time round.
The two issues which clinched it for Skywest was that Skippers didnt operate from the main terminal which made seamless checkin doubtful and the Braz had issue with wheelchairs.
Today however the playing field is very different, it's the F50 up against the E-Jet and the Q-400.
The best outcome for XR today is no route protection at all, since Geraldton, Albany and possibly Esperance are the only ones worth having. At least XR will be able to compete over those routes, where if route protection were to remain and XR didnt have those routes exclusively, then that would probably make the F50 operation unviable anyway.
Barrybeebone, Hoofharted, Pianokeys and Xeptu. None of you have any idea what you are talking about and thank god the policy makers weren't listening to your types. Greybeard and others speak a lot of sense and the extent of your knowledge Xeptu, as to why XR were successful, is just laughable. Long distances, few alternative transport options, small town populations, a precarious industry at the best of times and the chance for multiple ports to have a service of some sort on a regular basis to overcome the tyranny of distance, connecting to a capital city airport, where the profitable and semi-profitable ports support loss making ports, is sensible. The alternatives will bear testimony if deregulation is applied. How old are the Navajos??