Layoffs at Skywest
 

30 staff made redundent this past week at Skywest and rumours of another round early in the new year.
Management behind closed doors said to be in crisis talks, the word is that all the new charter work is not making money, underpriced? (Despite fuel cost coming down considerably?)
How worried should we be??? Anyone got the inside story?

This below reported by the company to the stock exchange in November, doesn't seem to add up to layoffs, in fact quite the opposite, it is saying business is booming so the layoffs are consusing to say the least; 'The fact that our charter service is performing well is testament to the success of our ability to be an integral part of the Western Australian natural resources sector. We have a number of contracts with some of the World's largest miners, which has allowed us to expand our fleet and the scale of the operation.' As a consequence of the recently announced Rio Tinto contract that was awarded to the airline for the Perth/ West Angelas/ Barimunya charter service, the airline has increased the scale of its operations by hiring significant staff and deploying two additional aircraft. The up-scaling costs in the order of $5m for this significant contract (inclusive of aircraft, additional pilots, supporting labour and other costs) will be faced in the 1st half of the 2008/2009 financial year. However, the increased activity associated with this and the other charter contracts is extremely significant for the airline and the Company. Skywest's additional contracted revenues, consequential to the last three scheduled charter service contracts signed, in aggregate, amounts to an additional AUD$111m over 3 years and subject to client option exercise AUD$170m in revenues over 5 years.

" As a consequence of the recently announced Rio Tinto contract that was awarded to the airline for the Perth/ West Angelas/ Barimunya charter service, the airline has increased the scale of its operations by hiring significant staff and deploying two additional aircraft."

Maybe management after hearing of Rio's yet to be fully disclosed staff cuts are just biding their time and putting the recruitment on hold for a while.

Smart idea I think.

i am surprised if they have laid off 30 staff. they seem to be very busy...

whats your source?

The source of the information is the staff themself. A group were called into a 2 hour meeting without notice and advised they were being terminated effective immediately. The terminations were from several areas including cabin crew, admin, safety, crewing, operations. A notice has gone out to staff saying to effect that it is necessary to sacrafice some to save others. I have not seen the notice myself.

No Flt crew have been 'put off'. A cabin crew ground school was cancelled, and the rest of the lay offs were admin.
I know a few more who have been given a heads up that their positions may not be available after christmas :(

Its a good time to consider the saying "the grass is always greener" more like "same **** different day."

I would not be at all suprised if the big mining companies dont start dusting off all the aviation FIFO contracts looking for the 'Force Majeure' clause........

The cabin crew were already in line training, ground school completed - bit more than "ground school put off"

Skywest have been very quick to put most of their eggs in the charter basket at the expense of RPT and the renewal of their dinosaur fleet of F50's.

Cancelling the KGI-MEL service because they needed the aircraft on a mining charter for example.

They wont be protected on the turboprop routes forever either...

Route protection expires December 30th, word is both QF and VB want in over the Geraldton and Albany routes and it's looking like thats likely to happen. Rio Contract was tendered at cost and thats before Rio roll back half it's services next year. There's no good news for XR for 2009 at this stage and quite frankly that doesn't come as any surprise.

Word is M****r is in trouble too with a couple of contracts being pulled due to service reliability and on time performance.

Hmm..the E-jet or the F50...I wonder which one the pax will go for?:E

You will probably find they will buy the ticket regardless of what aircraft is waiting on the tarmac. in fact I cannot ever remember hearing anyone ask what aircraft will be flying the route while purchasing a ticket.
If they dont have a choice, because its a protected route, they would fly in C310's if that was what was waiting on the tarmac.

to the-wizard-of-auz. I don't think that comment is true about aircraft types, especially on shorter routes. The reason locals don't ask about the aircraft is because they already know. If the equipment isn't acceptable they will drive. My partner travels to Albany and prefers to drive. Check in time, travel time, baggage collection time, waiting time, noisy propellers and taxis make the air travel thought unattractive to her. I'll bet she is not alone in that thinking. Anyway, this isn't really the topic of this thread .........

Skywest may get a reprieve if RIO palms off YANG and YBRY to BHP then the work would go back to NJS at a reasonable price instead of the win at all costs prices XR put into the market.
Will be an interesting year 09 in the WA FIFO market, bet there are not as many players this time next year!
Who will be the survivors?

Geraldton will surely get a jet service eventually but not sure about Albany. The runway there will require some $$$ to take E-Jets or similar and both ports would require some significant capex to introduce pax and baggage screening.

Plus I believe alot of dollars thrown at the unviable A320 project won't be helping matters any

So is there a genuine problem at Skywest or just a bit of 'belt tightening'?
Everyone is being squeezed at present. As for NJS getting West Angelas or Barrimunya, I'd have thought Alliance would be the next choice on a costs basis.

Im not sure of current staff numbers at XR but am guessing that 30 staff equals about 10% of the workforce, that is a big number in my view.
But, most intriguing I think, is that on 4 Dec the shareholders were advised that all is rosy and the company is under huge expansion, new aircraft etc and increased charters by some 112%.
To go from that 4 Dec announcement (see link to shareholder information on XR website) to only a week or so later laying off 30 staff (10%?) without notice does not stack up to just a bit of belt tightening.
I can not imagine how these two events - the shareholder good news advice followed quickly by the layoffs - can sit alongside eachother and make sense.

Now theres an understatement. The rate the mines are closing down and laying off people around these parts, There will be no-one to fly in or out soon.