Airline Profile- Kendell Airlines

Since its foundation in 1966, it has grown from a mere charter organisation operating an Apache and two Cherokees to Australia’s largest regional airline, uplifting close to 410,000 passengers in 1991. True airline operations commenced in 1974 when the Riley Heron, VH-K AM, was purchased from Air Pacific. To meet continuing growth on the Melbourne/Wagga route, a second Heron was introduced two years later.

The first major step for Kendell was to take place in 1978 with the decision to move into turbine powered and pressurised aircraft. Consequently the first 19 seat Metroliner II of the Fairchild Corporation was added to the fleet in 1978.

Self sufficiency in engineering was the aim of the airline. This would ensure that operations would run smoothly and efficiently by having at hand all the necessary spares, tooling and test facilities. With the introduction of the Garrett TPE331-3s which powered the Metros, the engineering division had to move quickly to gear itself to the new powerplants and their specific requirements. The base in Wagga was fitted out accordingly with spares provisions and a comprehensive computer stock control facility was established to allow immediate information on availability of parts. This information can now be gathered from Melbourne and Adelaide, and any required parts can be flown on the next flight to ensure the carrier’s enviable on time dispatch reliability. Today Kendell can perform any test, provide any part and replace any engine for its eight strong Garrett powered fleet completely inhouse.

Kendell Airlines is the only operator in Australia presently utilising Metros, and the only operator in the world performing RPT work with the TPE33ls. Without the facility to perform all its own maintenance and engineering work,there is no doubt that the Metroliners would need to have been prematurely disposed of, resulting in a costly move to expensive new equipment before it was really necessary.

The next major step forward was in 1985 with the introduction of the new technology Saab 340, Kendells being the first southern hemisphere operator of the type. This aircraft would allow Kendell to offer more competitive and appealing services over its network, which at this time comprised ofsevendestinations radiating from its hub in Melbourne. More routes were soon picked up from the ailing Ansett subsidiary, Airlines of South Australia, which meant a valuable hub could be established in Adelaide. Shortly afterwards, a second Saab was brought into service, and three additional Metroliners were acquired from failed Air Albatross in New Zealand which provided the capacity necessary to expand into Broken Hill, Port Lincoln, Whyalla, Ceduna and Streaky Bay.

In October 1986 the South Australian operator Opal Air ceased operating, which allowed Kendell the opportunity to move into that carrier’s ports of Goober Pedy, Olympic Dam and Woomera. Services to Ayers Rocks subsequently followed. The move into South Australia added 10 ports and 4,757km to the network. By 1988 Kendell Airlines was operating two Saab 340s and eight Metroliners. With the consolidation ofits new hub in Adelaide, and its existing south eastern network, the Airline had become Australia’s largest regional carrier, providing services for over 240,000 passengers in a single year. More importantly Kendell was profitable.

With the subsequent growth enjoyed by the airline, a third Saab (VH-KDI) was to be placed on the South Australian network. However, at the time of its delivery, the economy had begun to slow, and the AFAP had made its fateful decision to proceed with the pilots’ dispute.

Kendells, as a regional carrier, was in a favourable positionto be able to maintain services throughout the dispute, and with the addition of the new Saab, was able to supplement capacity where the major airlines were no longer able to serve. Tasmania in particular was hard hit. Services to Burnie and Devonport were provided ex-Melbourne with the available resources, which by this time were being stretched to the limit.

Passengers who used the supplemental Tasmania services were impressed by the Saab aircraft. Ansett withdrew its unprofitable Fokker 50 service from Melbourne to Burnie which was replaced by scheduled Saab operations. At the conclusion of the dispute, Kendell also scheduled daily services to Devonport, again utilising the 340s. Increased utilisation of the Saabs to Tasmania required the purchase of an additional unit which was acquired from French carrier TAT. Entering service in March of 1990, VH-EKT relaxed the strain placed on the Metroliners to maintain schedules over the much expended network.

In June 1990 the Kendell family sold all its remaining shares to Bodas Pty Ltd, a company wholly owned by TNT-News. The prime motivation to sell was the protection that could be provided by the larger company with the unknown factor of deregulation coming into effect in November of that year. Don Kendell maintains his position as managing director of the operation and as such is able to provide the value of his frank management style and philosophy.

Growth for the Airline was made possible primarily on two grounds. First, progressive expansion and consolidation of the networks allowed the resources to be built up around current business. Coupled with attainable goals, the airline, under normal operations, has not exceeded its equipment, logistic or financial resources. Secondly, by being self reliant in the fields of maintenance and engineering, Kendell Airlines has been able to avoid costly excessive downtime in waiting for spares and equipment.

Through shrewd manoeuvering and seizing opportunities, the management of the operation has been able to place itself at the door of established markets. Since the early seventies, Kendell has been able to move in where other operators have ceased operations, provide a reliable and frequent service and consolidate its position in the market making it profitable.

With its strong alliance with Ansett, Kendell has been able to provide substantial on carriage for both international and domestic flights. By utilising the Ansamatic and Galileo reservations systems the airline is also assured of exposure to a large market of travellers worldwide. A decision is yet to be made whether Kendell may adopt the AN designator in place of its current KD. Such moves by other regional carriers has allowed them increased patronage due to the more instantly recognisable designators of both Ansett and Australian. Currently, on carriage from Ansett contributes about 14% of total passenger uplift.

There is no doubt that the choice of aircraft has played a role in the airline’s success. The Metroliner II marked a major improvement from the slow, unpressurised Herons, and it was clearly more advantageous than the unpressurised Bandierante which did not even have de-icing at that time. More significant a contribution to passenger’s patronage of Kendell’s was the 340 selected because ofits advanced technology, passenger appeal, and operational performance. (The 340 burns less fuel at cruise than a Beech 1900 whilst seating 33 as opposed to 19). Product support from the airframe and engine manufacturers has contributed to a despatch reliability of 99%. Engine trends of the CT7 are monitored by daily communication with General Electric in Lynn, Massachusetts.

Another contributing factor to the success ofKendell Airlines is the structure of staffing and reporting. The operation is in the enviable position of maintaining its number one position as Australia’s largest regional operator whilst being small enough to allow management to keep in touch with all of its 198 staff across the network. 22 staffat the head office perform the diverse administrative duties including the processing of around 8,000 passenger tickets each week.

Kendell flight crew utilisation is keptup to between 800 and 900 hours per year, compared to recent industry figures of+/- 300 hours. Pilots also perform ancillary duties such as loading in smaller ports where extra labour for these duties is not essential.

Reports are compiled weekly on operations detailing load factors per aircraft type over each route. This enables the fine tuning of aircraft utilisation and where necessary, substitution of aircraft is carried out. Such reporting has provided average load factors of around 60%, with up to 91% regularly on certain routes. It also allows the opportunity to study market trends, which is especially useful for the planning and administration of the organisations package holidays which account for around 50% of the total uptake on routes such as King Island and Kangaroo Island.

In addition to these weekly reports, daily operational meetings are conducted with senior personnel to cover on a 24 hour basis the situations and requirements arising out ofdaily operations. As a result, any matters arising out of these meetings is able to be acted upon immediately, given the structure of the organisation and its hands on management approach.

The success of Kendells operations have twice been recognised by industry awards. In 1990 the Airline won the inaugural CAA Airlines Award for Excellence, coming out a winner against Qantas and Continental. More recently the operation has been praised by Air Transport World magazine as Commuter Airline of the Year. The prestigious award, accepted by DonKendell in Singapore in February, is testament to the philosophy ofKendell.

Whilst the ATW award will provide world recognition of success in the face ofadversity in the present industry, it will not alter the management philosophy of its founder and senior personnel. It does provide a lesson to those fallen, those now operating, and especially those considering commencement of airline services that empire building is not conducive to rational airline operations.

With current management strategies,Kendell Airlines will continue to prosper. The immediate future will provide further consolidation of current networks. If Ansett Expressare successful in the sale of their Fokker 50’s, Kendell may take up the Wagga/Sydney service dependent upon infrastructure available to a new operator in Sydney. Consideration is being given to a replacement type for the Metroliners which are presently at about 30,000 hours apiece. The Jetstream 31 andthe new Metro 23 are being studied with the view to introduction of a new type within three to four years.

Notwithstanding activity and market share, the bottom line indicator of performance is profit. This airline will not partake in operating routes to keep other carriers out, as is often the practice. The deregulated industry is (should be) one based on performance. As a regional carrier,Kendell Airlines has long been active in a deregulated environment and has been dependent upon performance for its success.

There is nothing pretentious about Kendell Airlines, nor was there ever meant to be. But nor is it a bare-bones operation. It is, though, both successful and profitable being built on common sense, after all, who wants to lose millions?