Reece

EWA would service every capital city except Canberra and Darwin with their MD-82s and would range as far north as Townsville. The two MD-82s would be used exclusively for this service and between them would log just over 9000 hours per annum operating an average of 190 hours weekly. The service would provide 18 Sydney/Melbourne, seven Melbourne/Perth, seven Brisbane/Melbourne, seven Brisbane/Townsville, 12 Sydney/Brisbane and six Melbourne/Hobart(all returns) per week in addition to a number of other less frequent sectors. At an 80% load factor, EWA is planning on absorbing 635,000,000 RPK (Revenue Passenger Kilometres) per annum which on 1981 traffic patterns would equate to 6. 7% of the Australian domestic RPKs.

EWA claim that this share equals the expected growth through this and the next financial year which would not then affect TAA and Ansett loadings and would provide the additional passengers for the MD-82 service when it commenced in 1985. EWA also claim that their service would excite the market and actually add to growth, thereby boosting the market beyond current projections.

East-West are planning on uplifting, at 80% load factor in their 155-seat MD-82s, 678,528 passengers per annum. The Melbourne/Sydney artery is the primary target with Sydney/Brisbane next, certainly not difficult routes to make money on. EWA are already noted for their attitudes to aircrew productivity and it therefore comes as no surprise to see them opting for an average of 600 flight hours per annum as against a current industry average of around 400. Brian Grey of EWA certainly feels more aircrew productivity is possible as US and European aircrews generally fly twice the Australian hours without degradation of safety or crew scheduling.

Crew calculations are interesting though. To support just a two aircraft operation a total of 14 First Officers and 16 Captains are required in addition to 80 Flight Attendants. In accordance with current DofAANO standards that require one FA per 36 passenger seats, EWA would typically task five FAs per flight. The requirement for manpower, over and above what EWA already possesses, is quite revealing. For instance, if the proposal gets the go-ahead then EWA claim an additional 567 job positions will be created, 105 of which will be at the carrier’s Tamworth base. This breaks down into 114 aircrews of various ranks, 33 in engineering and 53 in reservations. There are even 24 aircraft tug operators required in addition to 33 cleaners and 108 loaders.

Financially the operation is tagged (at current estimated costings) to gross $74 million in a year; allowing for direct and indirect overheads of $58 million it is estimated by EWA that a net profit in the order of $16 million should be available. The biggest single expense, as always, is fuel which for one year totals nearly $13 million as against a flight crew provision of $2. 3 million, $2. 6 million for technical crew and an engineering and maintenance allowance of $9 million. The aircraft with spares come to $A33 million apiece which more than anything highlights the pathetic state of the Australian dollar as against its US counterpart, a problem every importer of US-made goods is currently experiencing including our Department of Defence.

On paper, the MD-82 may look expensive but it is ‘today’s’ 150-seater and significantly more fuel efficient than the Boeing 727-200 presently used by both TAA and Ansett in this category. For instance, EWA estimated(per MDC reports) that block fuel burn between Brisbane/Melbourne is 15,490 lbs as against a typical 20,000 lbs for the 727-200. Melbourne/Perth is 27,700 lbs as against around 34,000 lbs and Sydney/Melbourne is 9100 lbs against typically 11,500 lbs for the trijet. Additionally, EWA is looking at operating at around 10% higher load factors than TAA and Ansett in addition to having an aprojectedhigher level of aircrew productivity. On the other hand, they are paying up front with expensive high-interest new equipment whereas the current domestics, and in particular TAA, are largely operating with written-down assets that provide an enhanced debt-to-equity ratio.

Certainly, the EWA proposal makes interesting reading from the point of view of how much effort is actually required to support what on the surface appears to be a simple two-aircraft operation. A requirement for 567 additional people and overheads of nearly sixty million dollars a year just to support two airliners gives one an insight into the ‘fragile’ nature of modern-day airline operations.

In presenting this article we would like to stress that Australian Aviation is neither in favour of the EWA proposal or against it. Like any proposal, it has positive points and negative points and needs to be seriously debited accordingly. Certainly, though interested observers might be forgiven for thinking that overall the EWA proposal has been partially rendered impotent by the recently introduced TAA and Ansett Super Saver fares while in the interim to reward its homework EWA has won an enormous amount of favourable media publicity for its efforts.

However, East-West’s current High Court action against the authority of the Independent Air Fares Committee Act may just make this situation an entirely different kettle of fish!