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And if anybody needed more convincing of the positive effects of real competition, consider that in August there was a 100% increase in pax boarded on the now fiercely competitive Brisbane/Cairns and Sydney! Perth routes in comparison to the same month last year. Despite this massive increase in uplift, and the very high rate of increased capacity throughout the overall market, the average Australia-wide August load factor has actually increased to a very healthy 76. 8% as against just 74,4% for last September quarter.

Overall, RPKs for the first eight months of this year are up 18% on the record year of 1988 and 30% up on 1990 whilst August RPKs are up 49% on the same month last year. In the first eight months of this year over two million more passengers have been carried compared with the same period last year.

And while extremely low fares have brought unprecedented demand for airline seats, Bryan Grey, CEO of Compass, has signalled a tightening of the capacity to deep discount that will inevitably see a movement upwards of some of the more heavily publicised low fares of recent months.

This is in response to the realisation that you can only take yield so low before jeopardising the entire operation of an airline. It is thus expected that from late October, fares will begin to rise with less deep discounting though the overall increase is not expected to exceed 15 to 20% due to the amount of capacity in the marketplace and the need for all the airlines to maintain relatively high load factors.

Old and New at Richmond:

This month’s RAAF 70th Anniversary Air Show features a multitude of interesting aircraft and equipment to keep the most fastidious enthusiast happy, but a couple of late confirmations add to the overall effect.

The RNZAF’s already substantial involvement will be boosted by the appearance of two of its brand new Macchi MB-339 advanced jet trainers, a modernised and more powerful development of the MB-326 which serves with the RAAF The Macchis will fly on all three days of the show.

Of great interest will be the appearance of the only airworthy example of the fleet of Canberra bombers once flown by the RAAF Canberra A84-229 is travelling from the USA for the show via its former base at Amberley in Queensland. The Canberra is now privately owned in the USA and was delivered there last year as part of the deal which saw. the RAAF Museum’s Lockheed Ventura arrive in Australia in 1988.

Not confirmed at presstime but 99% certain to appear at the show is the world’s smallest jet, the ‘Coors Lite, Silver Bullet”, a Bede BD-5 which is only 3. 5 metres long and is in fact smaller than a Boeing 747’s engine. The BD-5 was used in the James Bond film “Octopussy” and these days is used by the US military as a cruise missile simulator for radar tracking systems. If the BD-5’s appearance is confirmed, this smallest jet will ironically be carried inside the western world’s largest, the C-5 Galaxy.

Ansett Express Continues Evolution:

Hub buster, Ansett Express continues its logical evolution with planned further expansion of its northern Tasmanian services into Adelaide and Sydney.

In fact, all services by Ansett into Launceston by mid October will be via Ansett Express F28s. The little airline is also beefing up its Canberra/Melbourne schedules since the recent introduction of its three abreast business class which is to be further upgraded early next year with improved seating and permanent cabin dividers. Canberra and Launceston are seen as star ports within the network and both will receive additional services once extra capacity is available. The airline presently flies five F28-4000s, and two each of the -1000 and -3000 model in addition to four Fokker 50 propjets which are used primarily on the booming Sydney/Can- berra shuttle.

Meanwhile, around 40 of the airline’s operations and finance staff have been redeployed to Ansett Australia to rationalise internal operations. This had been the case with Ansett WA for the past two years and was not totally unexpected.

 Both Transcontinental Australia North West Airlines Hoping for Next Year Start Up:

Proposed new entrant, TransContinental Airlines hopes to now begin operations around April 1992 following the expected arrival of the first of six Boeing 737-500s in March.

The aircraft will initially be operated against Ansett WA in West Australia in a 90 pax configuration though they will also commence services linking Tasmania with the mainland before venturing into the primary eastern states ports later in the year.

Meanwhile, mysterious Perth entrepenauer Richard Goldsmith continues to plan for his long proposed Australia North West operation, using Fokker 100s and Saab. 340s to also go head to head against Ansett WA and Skywest.

However, for either operator to gain a WA State Govt air operators licence they must first have a suitable VH registered aircraft and consequently either operator will not be granted such till they actually own appropriate aircraft and can thus satisfy the States’s transport ministry that they are fully capable of conducting RPT services over WA air

routes. AA Comment: The spectre of possibly three jet operators flying the long haul/low density routes of Western Australia is something that not suprisingly has many financiers shivering. Whilst there might be some new leisure traffic to the deep discounts that will become ops normal in a demographically limited market will only serve to guarantee the demise of possibly all operators.

There must be more intelligent ways of turning a dollar than this fiscal stupidity. Particularly when it has been proven time and again via the US experience that any market will only take so much capacity before it becomes uneconomic for all concerned.

Government Rips off Air Show:

This is almost unbelievable but unfortunately true.

The RAAF 70th Anniversary Air Show at Richmond will cost the Australian taxpayer a maximum of $20,000, in fact probably nothing at all. The RAAF’s involvement is covered under its normal operating budget and the entire financial risk ($1. 7m) is carried by the organisers, the non profit Aerospace Foundation of Australia Ltd.

Yet, the Commonwealth Department of Finance has decided that up to 75% of the profits from the show will go back to them, under the Government’s cost recovery program. The finance department has put a $2. 2m price tag on labour (most of which is voluntary) and equipment associated with the show and wants it back. Without the organisers agreeing to this extortion, the show would not have been able to go ahead. It’s important to note that the $2. 2m is a book entry figure only as noted above, the actual costs are already accounted for and covered.

The bottom line is that one group takes all the risks and the Federal Government reaps the benefits. To add insult to injury, the finance department isn’t even prepared to say that the money will go into the RAAF’s coffers. It will probably go into consolidated revenue and end up who knows where. . .

AA Comment: After seeing how the Government milks the aviation industry via the CAA and FAC (refer p. 4 Dec 90 AA) it is not surprising that it has also identified yet another source of funding for its bottomless coffers. This type of “blood from a stone” mentality unfortunately pervades the higher echelons of both Treasury and Finance with the full support of their ministers and is a product of the same mentality that recently killed off the VFT project in one fell stroke (refer p. 13 this issue).

As mere taxpayers we cannot unfortunately do little more than have our democratic whinge about such stupidity, though you might be well served by keeping it in mind when next you visit the ballot box.

Rural Fare Wars:

The current bout of heavy fare discounting by the major airlines is spreading to intrastate operators, at least in New South Wales.

Eastern Australia Airlines and Hazelton. Airlines have both announced large cuts of up to 70% with the aim of attracting new customers. Both are offering a $65 single fare ($130 return) from Sydney to 27 NSW country centres including Broken Hill, which usually costs more than $300. The offer lasts only until the middle of this month and tickets must be paid for within 72 hours of ordering, although they can be used at any time up until the end of February 1992.

One in five seats on the two airlines’ aircraft have been set aside for the new fares while Ansett Express has matched them on its competitive Albury and Dubbo services.

 Australian Aviation College to Expand:

Hawker de Havilland’s Australian Aviation College has proven so successful that it is now intended to establish a second school beyond the metropolitan Adelaide region.

As the AAC becomes more successful in attracting airline pilot trainees from abroad and looks set to win a slice of the RAAFS flight screening work (refer p. 22 this issue) the need for a second training centre is becoming crucial as operational growth at Parafield is limited by environmental, capacity and weather constraints. A number of sites are being investigated, all within 150nm of Adelaide with the favourites being in the Gawler, Renmark region.

Needless to say local councils have been beside themselves in submitting attractive offers due to the windfall that such a school would bring to their communities.

Ansett Express Drops Casino Jets:

Ansett Express is moving all of its far northern New South Wales F28 jet services. from Casino to Ballina.

The move adds another twist to the ongoing Casino/Lismore/Ballina airport tussle, but it clearly indicates Ansett Express is gearing for intrastate deregulation on the routes between the three ports; Sydney. Casino and Lismore licences come up for grabs next year and there’s no guarantee Ansett will get them, and so the move highlights the company’s posturing for competition in the lucrative catchment area. The licence situation puts the northern New South Wales ports in an ideal situation for deregulation of the routes.

In the meantime Ansett Express will fly a triangulated afternoon Sydney service between Lismore and Casino (airports a mere 30km apart) using Fokker 50s to satisfy its current licence obligations until June 1 next year.

Eastern Airlines has already indicated it’s keen to again go for the Lismore licence using Dash 8s, and Hazelton says it’ll have its eye on the area as well. Ansett Express in the meantime says having three airports within 60 kilometers from each other has confused passengers and fragmented the market. (Haldon Boyd)

Flying Into Ground Still Killing:

Most jet transport fatalities are still caused by controlled flight into terrain (CFIT), despite a decrease in this type of accident since the introduction of Ground Proximity Warning Systems (GPWS).

Over the past three years CFIT has caused 1,088 of 1,492 jet transport fatalities, figures which exclude military accidents and sabotage. GPWS has been mandatory equipment on all US commercial jet transports since 1977 and over the last decade, CFIT accidents in the USA have averaged one per ten million scheduled commercial flights. The average is substantially higher for the rest of the world because many carriers still do not use GPWS.

In the mid-1970s, the USA went six years without a CFIT accident, but there were five over the next six years mainly because GPWS were either ignored or switched off.

Lufthansa Fights Back:

Lufthansa has asked the German Government to negotiate a new bilateral agreement with the United States and has called for an end to ‘dumping’ (providing excess capacity and selling the seats at below cost) on the North Atlantic routes.

The airline says that the current USA/Germany bilateral agreement is totally outdated and that Lufthansa does not compete on equal terms with the US mega-carriers. US airlines can fly from any city in the US to any point in Germany and beyond to Europe and Asia, while Lufthansa’s access to the US market is limited to 10 cities.

agreement The current US/Germany stems from the Cold War era when PanAm and TWA were the only US airlines serving a German market which included Berlin but not points in what was East Germany. Eight US carriers currently serve Lufthansa’s hub at Frankfurt. The German airline claims that the large US carriers are trying to drive weaker competitors off the North Atlantic routes by dumping capacity and that they are able to indulge in such tactics because they are totally protected from foreign competition within the US domestic market.

The result is distorted competition, according to Lufthansa, which also says that if things continue as they are going, the German airline industry will be nothing more than an internal German feeder service for the large American carriers by the turn of the century.

F-16 Cracks Stop Top Gun:

Cracks discovered in the fuselage carry-through bulkhead and fuel shelf of the US Navy’s General Dynamics F-16Ns have caused major disruptions to its Top Gun Navy Fighter Weapons School program.

The USN uses the F-16Ns in the adversary role in training, and of the 26 aircraft in service, 18 were not flying in August and September due to the cracks. The Top Gun school subjects the aircraft to unique high-stress missions which could not be performed, resulting in the August class being cancelled.

Navy A-4 Skyhawks and some USAF F-16 have been called in as replacements the Navy F-16Ns undergo repairs.