Airline Profile – Hazelton Airlines

Although he sits on the Aviation Advisory Board and has frequent and close dealings with the highest levels of state government in New South Wales, Max Hazelton suggests that guidelines and regulations laid down by the bureaucrats have stifled operations for regional carriers such as his own.

Though Hazelton Airlines has ended “one of the biggest years it has ever had”, it still faces what it considers unrealistic levels of competition on some routes from the present licensing agreements, and what appears to be an endless array of charges laid down by airfield operators, the Federal Airports Corporation and the Civil Aviation Authority.

“I believe the State Minister is entirely wrong in what he’s doing, when he says he’d put another operator on a route as competition in order to give lower fares to the travelling public”, says Max Hazelton.

“Commonsense is not prevailing because when you have a lower load factor you have to increase your yields to stay viable. ” This, then, is contrary to the ideals of increased competition leading to improved services to the community. “Look what happened to Compass I and II?” Exemplifying the difficulties, after having recently been awarded the Armidale/Sydney route and having attained a fair market share, Hazelton is already having to review its operations as a result of the over capacity being offered by itself and competitor Eastern Australia.

“On the Armidale route at the moment there is insufficient traffic to justify two 36 seat aircraft flying at very low load factors and losing a lot of money. We cannot go on substantiating that type of loss. ” Until recently, up to five services a day, or 180 seats, were provided to Armidale from Sydney by the competing carriers at average load factors of 20 to 30% a lot of seats for a market which is economically strapped in the face of decline in the rural sector industries.

The alternatives the company must face to improve viability is to reduce the capacity by operating a smaller aircraft such as a fast pressurised 19 seater or being more aggressive with an improved schedule.

Maintaining efficient operations

The move to a 19 seat aircraft will see the introduction of the Metro 23 to the Hazelton fleet, a type which already serves with Kendell Airlines and Tamair, and it is expected that the new aircraft will bring Hazelton closer to the 60% load and 80% yield it needs to make the routes like the Armidale run truly viable. Eventually Hazelton would like to phase out the Shorts 360s which have been used on the short haul sectors to the central west (Bathurst, Orange and Parkes) and the south coast (Merimbula and Moruya).

While the 360s have been a valuable aircraft for the company since their delivery in 1989, the flexibility of a 19 seater in the fleet will allow more effective management of the capacity offered on all routes. Hazelton’s also see this move as a step in the right direction in the standardisation of its fleet which will ultimately comprise Saab 340s and Metro 23s with Chieftains for the time being remaining in service on feeder routes. Despite a glut of 360s on the world market, the two ‘Sheds’, which are higher powered hot & high versions, are expected to be attractive to buyers. Hazelton will also add another 340 to the fleet as the last Shorts is sold, bringing the total Saab fleet to six aircraft. Hazelton’s 340s are among the highest utilised in the world, and at present average 3000 hours per annum. The aircraft’s GE CT7 engines are also achieving record hours in excess of 6000 before overhaul.

Part of the airline’s success revolves around its reliability, a success that Max Hazelton claims is due to the efforts of its maintenance and engineering force, and the quality of the equipment it operates. The GE engines aboard the 340s are trend monitored daily by the engine manufacturer’s central office in Massachusetts, aiding in an exceptionally good despatch reliability of 99%.

The company’s private airfield and engineering facility in Cudal can provide all routine and heavy maintenance and inspection services, which is performed during overnight shifts, playing a crucial role in Hazelton’s ability to maintain peak utilisation and adherence to schedules. Six engineers are also based in Sydney for line maintenance.

Hazelton has continued to defer the conversion of options on two Saab 2000s. The ability to achieve peak utilisation out of the larger aircraft will be largely dependent upon whether any of the majors (especially what’s left of Ansett Express) pull out of regional routes leaving Hazelton the opportunity to take over, and the determination of licensing agreements in New South Wales.

“It is harder to get productive utilisation out of a larger aircraft such as the Saab 2000 throughout the day. They are good during the peak periods, but not as viable at other times unless worked on major ports only where other aircraft could feed into to give the numbers. ”

“almost 19% of every ticket we sell on a standard fare is government charges. “

Not only is the company faced with low yields in the deregulated market, but also a series of what Max Hazelton terms ‘discriminating’ charges imposed by government authorities, such as the peak hour charges at Sydney Airport on NSW regional passengers.

The charges at Sydney Airport create great concerns for Hazelton, with a $250 peak use charge applied to every aircraft between 0800 and 0900, regardless of its capacity. “In the last financial year, our company alone paid over $1 million in peak hour charges, which I believe serves no purpose whatsoever. ” Echoing the sentiments of all small feeder operators, Max Hazelton states, “It is a very discriminating charge against the country people because the smaller aircraft that serve these routes are very severely affected. ” The fares of five or six passengers which typically fill one Chieftain would not, in this context, cover the peak hour fees together with other operating costs. “A larger aircraft with up to 300 passengers still pays $250, equating to less than a dollar per passenger. ” As an alternative to peak hour charges, Max Hazelton suggests that schedule coordination is the most effective – and fairest – way to eliminate congestion at Sydney Airport. The airport’s capacity is 60 movements per hour unless the STARS system (refer p6 Dec 92 & Sept 93 AA) is allowed to be implemented until the third runway is completed, though presently at some times there are up to 15 aircraft arriving within a five minute period. New operators coming on line should be made to take up the available slots, maximising efficiency and substantially avoiding congestion giving a constant flow of traffic.

Max Hazelton is hopeful that enquiries into charges levied by the FAC will also see a more reasonable distribution of the landing fees at Sydney Airport. In addition to the peak hour surcharge for the FAC, Hazelton contributes to the CAA’s coffers through airways charges. “Just to give an example, the new route which we operate from Casino through Lismore to Sydney, in one week of operations at three flights a day, is costing us $17,000 in airways charges. ” This is despite a reduction in the charges by the CAA of about 25%.

Representing an enormous financial responsibility for the airline, high load factors and yields are needed simply to meet these government imposed costs. “In fact, to put it another way, almost 19% of every ticket we sell on a standard fare comprises government charges. ” It was in September 1991 that the culmination of increasing costs and lessening yields saw a dramatic reorganisation of the airline and its network. Some 14 country towns, or about 35% of its network were dropped from the schedule, including Bourke, Brewarrina, Coonamble, Cowra, Coonabarabran, Cootamundra, Forbes, Gunnedah, Lightning Ridge, Nyngan, Quirindi, Temora, Walgett and Young.

The move, whilst having dealt a temporary blow to the fourteen country towns, undoubtedly saved the airline and allowed it to continue operations serving as the state’s largest independent carrier.

In a further rationalisation, the company also sold six older Navajo Chieftains and reduced its total staff from 180 to 130. The reduction of overheads by approximately 40% proved to be the right medicine, and with a reduction in revenue by only 15% the company is now trading profitably again, and continues a careful course of expansion by concentrating its 36 seat operations on the larger regional centres. A number of new routes were added to the network from December 1992 using two additional Saab 340s delivered in December 92 and January ’93 to Albury, Armidale, Casino, Wagga, Launceston, Lismore, Traralgon and West Sale.

West Sale, which had never received a scheduled service before, is proving to be a jewel in the Hazelton network. The area, which has a potential market of over 300,000 people, has benefited from over $450,000 of local and state government assistance in the development of the airfield and terminal facilities. Max Hazelton suggests that this type of cooperation should be more commonplace if regional airlines are to truly serve rural and smaller urban communities.

“We are very grateful for what (the Victorian government) has done. “The agreement with the local government provides Hazelton with the exclusive right to operate from the terminal for the next five years. The company also appreciates relief from the lack of landing charges at the airfield, and benefits doubly from being the sole provider of services on the route which connects West Sale with Albury, Sydney and the La Trobe Valley town of Traralgon.

“The enthusiasm that has been shown in the West Sale and La Trobe areas has been tremendous. ” Businesses, including the area’s major paper milling industry, are increasingly optimistic with signs of growth and increased investment already emerging since the commencement of direct air services.

Hazelton has been responsible for opening up many rural centres since it commenced operations in 1953, and today is still facilitating growth in most of the rural areas it serves. The 22 port network remains a predominantly business oriented market (approx 60% of uplift) providing the airline around 300,000 passengers each year.

Tourism supplements the business traffic, and the company has initiated a number of competitive discount fare structures and package holidays that allow Sydney passengers the opportunity to visit country areas, boosting tourism in regions where traditional industries are suffering. Hazeltons also operate the Mystery Flights and Mystery Weekends, which have been particularly popular with the major carriers, to popular tourist destinations throughout New South Wales.

The move to Ansett

On April 20 1993 Hazelton Airlines ended a three and a half year association with Australian Airlines at Sydney Airport, when it moved to the Ansett terminal.

Australian over the years, we were reaching saturation at the “While we have had a very good working relationship with terminal even before we brought the two new Saabs into service. In addition, Australian has a terminal expansion programme that would have resulted in a great disruption to our services”, says Max Hazelton.

In one of its busiest years, the airline has experienced a 30% increase in its traffic, which Max Hazelton suggests “has been principally as a result of the move to Ansett. ” Hazelton is also now a member of the expanding frequent flyer scheme. would want to pull away from in the future, and being on the “We also believe that Ansett had areas that they perhaps doorstep at Ansett will put us in a favourable position with more opportunity for expansion. ” It is conceivable that with Ansett directing its attention to operating on the prime traffic could rationalise its regional operations allowing the smaller networks and to newly developed international services, it carrier to take over some of its services.

The future

Seeing signs of recovery in the industry over the next eighteen months, Max Hazelton is placing his airline in a position to benefit from the expected increased numbers of people flying in the rural communities.

He believes that the company is performing well now despite the difficult conditions in the industry. But wary as always and wry to an opportunity, Max Hazelton says, “Wecan never become complacent with the industry and we have to control costs”.

For the sake of his own enterprise, and for that matter the good of the regional aviation industry, Max Hazelton will not be lying down when it comes to undue outside influences that adversely affect operations: “I strongly think that in the future the Minister should sincerely consider what he’s doing. I believe that if the operator is not performing, the public has a right to complain to the airline licensing council, and then if that operator is found not to be performing as required, or they should have the option then to ask the operator to rectify their performance, or have competition on the route. ” This might just account for Hazelton’s success – it has the support of the community because it’s part of it. Its intentions have been clear from the outset, take the opportunities to serve the community with the service it requires and it in turn will support and foster the provider. On a number of occasions, Hazelton’s competitors have found out just what this means.

A Retrospective. . .

1953 was the year that one of Australia’s regional airline success stories commenced. At 26, Max Hazelton bought his own Auster Aglet at Bankstown for the not inconsiderable sum of $2500, an investment that he named Hazelton Air Taxi and Charter Service.

The business was based at the family property at Toogong in central western NSW. With the help of a single employee and one of Max’s brothers, the fledgling operation soon outgrew the capacity of the Aglet, and just six months later, the decision to expand the business lead to the purchase of an Auster Autocar.

The boom in the wool industry of the early fifties saw the Auster aircraft used to their maximum utilisation, flying sheep buyers around the region. When work was slow, Max would take the Auster barnstorming around West Wyalong and Barmedman, and joy rides for 10 shillings a head helped support the income.

In an attempt to secure the longterm financial well being of the company after the boom period, Max Hazelton undertook aerial paper runs as an extension to Butler Air Service’s Bathurst based operation to Cowra, Forbes, Dubbo, Welling- ton, Parkes and Mudgee. The operation often saw aircraft delayed or grounded by bad weather and unusable strips, and the decision was made to terminate the paper runs in favour of the far more rewarding pursuit of passenger charter work. It was flood relief work that cemented the role of Hazelton in the rural community, and the diverse conditions in which Max Hazelton and his brother flew made them confident in their ability to handle almost any type of flying.

As business continued to grow, Max’s brother Jim Hazelton took the Autocar to Queensland to develop a service from Lindeman Island to Mackay.

In October 1954 the Aglet was lost in an accident in the Blue Mountains which saw Max stranded in the bush for six days. With 50% of the Hazelton fleet now gone, the operation’s increasing business clearly saw the need for a replacement aircraft. The choice of the Cessna 180 was an easy one, however, the $10,000 price tag was not as easily overcome. Max’s brother eventually helped to finance the new aircraft and VH-BDQ was delivered in November of the same year. Cynics who said the aircraft could not pay its way were proved wrong, as demand for the modern comfortable aircraft saw the need for a second 180 which was purchased just five months later.

Believing that there was potential for the development of aviation in agriculture, the Hazeltons investigated the use of Cessna 180s for the spreading of superphosphates. The use of aerial spreading grew rapidly as farmers recognised the value and efficiency of using aircraft.

In 1959 Hazelton Air Services moved to Cudal, where its headquarters remain today born out of an oat paddock with soft, red sticky mud. Hangars were built to accommodate the servicing of aircraft and an administration area. A one thousand meter runway was constructed by the family and by 1961 the airfield was operational.

By 1965 the growth of the agricultural division of HAS dictated the need for additional aircraft, and after exhaustive appraisal of the Cessna AgWagon, an order for six was placed at a cost of $15,000 each. That same year, Hazelton aircraft spread over 63,000 tons of fertiliser, and the fleet’s capacity grew to 100,000t per year. In 1977 an AgTruck was introduced, and such was the extent of the HAS agricultural enterprise that company staff and aircraft would soon be permanently based at country locations.

The association with Cessna continued with the delivery of a 310, which was also used for charter and air ambulance work in the central west region. The move to larger aircraft was spurned by the withdrawal of government bounties on superphosphate in 1974, which saw a dramatic downturn in the use of aircraft in agricultural work. If Hazelton was to survive, a move to regular passenger services would be required.

The airline took delivery of its first Navajo Chieftain in 1975, bringing the charter fleet to a total of five, including three Cessna 310s and one Twin Comanche. The new Chieftain opened up new routes including the first service scheduled from Orange to Canberra.

In 1978, after having commenced regular charter services from Orange to Sydney and having expanded its services to include flight training, agricultural work, general freight and commuter services, HAS had become the largest general aviation operator in Australia. Employing 60 staff and maintaining a fleet of 31 aircraft, Hazeltons has been ‘recognised throughout Australia as a modern aviation company with a strong sense of community responsibility and a dedication towards meeting the needs of country people.

On October 29 1979, Hazelton won a long argued battle with the government to commence scheduled daily operations from Cudal to Sydney. By May 1981, the frequency of services had increased to five per day to meet demand from a supportive business community. It is an interesting statistic that while Cudal has a population of around 400, Hazeltons moved nearly 17,000 people through its airport in one year – an indication of the reliability and support of the services offered by the airline.

To meet with the continuing high demand for scheduled services on an expanding network, the company introduced an ever widening range of aircraft to the fleet, including Beech Super King Air, a Citation II for VIP charters, Beech 1900C and Bandeirantes. Larger 36 seat aircraft were purchased in the shape of the Shorts 360 in 1989, and Hazeltons became the second operator in Australia to introduce the Saab 340 in 1990.

It is against this remarkable background that Hazelton’s stands to remain one of the country’s foremost regional airlines. A clear understanding of the airline’s objectives since the first day of operations some 40 years ago has kept the airline pretty much on course, despite some very trying circumstances.

All things being fair and equal, the ‘Big Country Airline’ will continue to be an example to many regional operators for at least another four decades.

The Hazelton fleet – Piper PA31-350 Navajo Chieftain: VH- CJQ, MWP, MZF, MZK, MZM, MZV, MZX. Saab 340B: VH-CMH, LIH, OLM, OLN. Shorts 360-300: VH-MJH, MJU (for sale). Cessna 310R II: VH-MXY, UJF. Fairchild Metro 23: VH-DMI.