Airline Profile – Flight West

However, the right mix of business aggression and the practical commonsense for which Sir Dennis is noted, mixed with sensitivity to market requirements, has created a viable airline whose strength has seen it survive the economic recession and increasing operating expenses. The independence of the airline has been a large factor in the success of its market share and financial well being.

According to Scott McMillan, financial controller of Flight West, “A 36 seat Dash 8 will only support a certain amount of overheads (referring to operations run by larger carriers). That’s one of our major benefits: we are independent and we don’t have to have huge head office overheads”.

While providing examples of airlines having folded as a result of lack of capital, McMillan is emphatic when he says that Flight West will not allow itself to run into such a situation. The airline is a family company owned by Sir Dennis Buchanan, has no outside shareholders, and is one of a number of aviation interests of the family which includes the regional airline Talair in Papua New Guinea and a new commuter operation in the Philippines.

The experience and bullishness of the management shows in the successof Flight West. When Australian Airlines announced its withdrawal from the western Queensland network in 1987, the State’s government called for interested parties to operate reliable and frequent ‘essential services’ to the mining centres of the region, which would be government subsidised.

From the time of being awarded the contract by the Queens-land government to the required commencement date, Flight West had only three weeks preparation time. In June 1987 two Beech King Air 200s were leased from Skywest in Perth, and were immediately put into service connecting the western mining centres such as Mt Isa, Longreach and Emerald with Brisbane and Townsville. October 1987 saw the addition of services to the Gulf of Carpentaria, when independent operator Air Queensland withdrew after being taken over by Austral- ian Airlines.

With the contract for the Queensland Flying Surgeon and Flying Gynecologist having been awarded to the airline in 1988, and routes picked up from ailing carriers, the network grew rapidly and with it a fleet which consisted of five Baron 58s and a single Bandeirante in addition to four Beech 200s.

The initial requirement of the government in 1987 for the new incumbent of the essential services was to provide pressurised services, which saw the Beech King Air and the Cessna Conquest as the only viable alternatives. The selection of the B200 has proved to be popular with both the operator and the

market. Initially the contract routes could sustain only smaller aircraft such as the Beech, though over the period of operations the capacity on most routes has had to be increased to a 30 seat type such as the Brasilia.

In October 1989 Sir Dennis closed down his Air Melanesie operations. As a result two DHC-6 Twin Otters were trans- ferred to Flight West’s northern operations, and these aircraft would prove invaluable on the short unprepared fields of the Gulf and Cape regions.

Meanwhile, the need for improved services on the routes to the mining towns of Mt Isa, Emerald and Roma saw the introduction of the first Embraer Brasilias in Australia. These faster and more comfortable aircraft are ideally suited to a market which is hard to both operate and satisfy. Whilst carrying 30 passengers compared to the 19 seats of the King Airs which had previously operated the route, the Brasilias are 60 knots (110kmh) faster and also have the advantage of inflight service facilities.

The Brasilias were the last aircraft to be certified under the old CAA procedures. Only minor alterations were required to the basic aircraft to suit local certification requirements. Members of the CAA inspected the aircraft at Embraer in Brazil, while Flight West engineers and flight crew underwent training at Sao Paulo. Overall, the introduction of the EMB-120 has been a costly investment for the airline, but such is the satisfaction with the type that Flight West is considering the confirmation of an option on one more Brasilia, and is considering the EMB-145 regional jet, dependent upon its final design and operational parameters.

With the addition of a Dash 8 from Talair in the third quarter of 1990, a new commuter service was commenced along the coast of Queensland between Brisbane and Cairns. The five hour one way trip between the two cities also connects the major towns of Gladstone, Rockhampton, Mackay and Townsville, providing an effective shuttle service twice a day for these coastal communities.

The selection of aircraft has essentially been based on suitability to route requirements. The availability of aircraft from Sir Dennis’ Talair has also been a major advantage to Flight West. As Talair went through a process of fleet trimming as a result of its economic circumstances, Flight West was able to adopt the aircraft to suit specific routes and with the steady additions of various models over the past five years, the airline now operates no fewer than eight types in its fleet.

“The fixed costs of aircraft have prompted a worldwide move to utilise only aircraft with 19 seats or more”, says Scott McMillan, of the programme of fleet rationalisation Flight West has begun. Eventually it is hoped that the Brasilia and Dash 8 will be the only two staple types operating the diverse RPT sectors of the network. The Barons will be kept for their medical role in the western areas and for ad hoc charter work. With the gradual disposal of the older Beech 200s and the likely order for another Brasilia, the airline is also considering the purchase of an additional Dash 8 for its high volume sectors. These immediate moves certainly show that rationalisation is well underway, though it is expected to be another five years before the programme is complete. All the aircraft of the Flight West fleet are owned-none are leased. Such a heavy investment means that utilisation must be kept to optimum levels across the network. Presently the Dash 8 and Brasilias are averaging around 3000 hours per annum, and for a few months during 1991 the airline topped the worldwide monthly utilisation of the Brasilia and the Dash 8. Current average loads for the EMB-120 and Dash 8 are 60 to 70per cent throughout the network.

In June 1991, Flight West took the opportunity to break out of its regional operations to provide daily services linking Brisbane and Coolangatta with Canberra using one of the Brasilias freed up by the delivery of a second Dash 8. Fearful of the competition this may represent, Ansett Express and Australian Airlink almost immediately assigned aircraft to the same route; a move which after a period of only six weeks saw the end of Flight West’s interstate debut.

Not only does this example show how smaller carriers are sometimes at the mercy of larger operators who can subsidise less profitable routes from their trunk routes, it also shows that the swift actions of a small and reactive management team of an independent carrier can quickly set in place the necessary short term operational tactics to maintain profitability.

Future plans to expand operations will be governed by the economic viability of routes in the face of state deregulation in New South Wales and Queensland. Flight West has undisclosed plans to move into some sectors in New South Wales as the state is further deregulated over the next three years.

However, of more immediate concern is the Queensland government’s continued protection of the Weipa and Thursday Island routes currently served by Ansett and Australian. With federal deregulation the regional carriers of that region were hopeful of the opportunity to compete on the lucrative sectors. Despite some discussion that the government was reviewing its policy on the state protection of AN’s and TN’s services, there still appears to be no firm commitment to allow Flight West, or indeed any carrier, to compete fairly.

Pilot utilisation is kept in the vicinity of 800 hours per year of the allowable 1000. Special dispensations have been awarded by the CAA for crews to operate the coastal commuter service. With the BNE/CNS sector taking five hours, the day’s return operation is around 10. 5 hours. For crews to be allowed to fly this route, they must have the day before and the day after off duty. Cabin attendants fly the coastal service on an average of once per fortnight and are otherwise flyingthe Brasiliaservices to western Queensland. Of the 250 staff of Flight West 80 are pilots and 20 are flight attendants. The remainder perform administrative duties and the valuable engineering work for the airline.

Heavy maintenance and paintwork is performed at the airline’s Brisbane airport facility. The modern workshops are capable of providing airframe work on any aircraft of the fleet, and this together with painting is undertaken in two shifts, seven days per week. In addition to the facility in Brisbane, engineering bases are also kept at Cairns, where the engineering staff are based, and a hangar at Mount Isa. Having these facilities at each end of the network provides greater flexibility in operations and the ability to provide reliable services.

Some components and avionics are sent to contractors, and all engines on the B200s, Twin Otters, Bandeirantes, Brasilias and Dash 8s are sent to Pratt & Whitney in Canada.

The operating costs of such an extensive regional and commuter operation are very high for Flight West. The company pays out just under $500,000 per month in air navigation charges to the CAA alone. Council operated aerodromes on the coastal fringe charge a disembarkation fee of $5 per head. On a sector such as Gladstone to Rockhampton with a fare of $50, this fee represents up to 10% of the total ticket value.

Despite its independence, the carrier has found advantages in aligning itself with Ansett in an effort to consolidate its strong hold on regional operations. As the management is very quick to point out, Ansett has no control over Flight West operations, but does allow for mutual benefit in providing improved services.

Some code sharing is operated on routes where Ansett is not able to provide a viable sustainable operation of its own, such as the Queensland coastal route. In addition, an agreement has been signed which sees Ansett providing ground handling in some ports, and catering for allin flight services. In March 1992 Flight West became a member of the Ansett frequent flyer programme.

One major advantage of the alliance is the oncarriage which is supplied to it by Ansett. On routes such as the coastal commuter service, Flight West can now compete more aggressively with Sunstate who has recently commenced a similar Dash 8 operation with oncarriage supplied to it by Australian. It now has a market share on this route of approximately 50%. As a further benefit, Flight West is now co-hosted in the Ansamatic CRS.

Flight West does not ever foresee the need to merge with another major. It enjoys its independence too much. The ability to make its own decisions, and mistakes, and look after its own has made the airline and its staff stronger. There is still a family feeling about the organisation, and its spirit is what makes it successful. Scott McMillan summarises the essence of Flight West thus; “Right from the outset the people of Flight West have tried that little bit harder. The Company doesn’t survive because it has a rich parent, and the Company has to survive for us all to have jobs. ”