North, south & west

Alliance moved into Western Australia in 2006, winning a five year contract from BHP Billiton to serve its Leinster and Mount Keith nickel mining operations from Perth.

Then, last year, it gained another key BHP Billiton contract in South Australia, taking on the service between Adelaide and Roxby Downs – the outback centre for the massive Olympic Dam copper- uranium-gold mine – and displacing Rex as the RPT operator on the route.

As the giant international miner moves towards a formal go-ahead for its proposed $7 billion expansion at Olympic Dam, with much preliminary work already under way, the aviation task, which began last July with two Fokker 50 turboprops, is building up significantly.

Meanwhile, Alliance has captured the contract to serve Oxiana’s $1. 08 billion Prominent Hill copper-gold development, with a fly-in, fly-out operation for staff at the remote mine, north of Roxby Downs, also using Fokker 50s.

The SA business has been “going gang-busters’’, according to Alliance’s business development manager, Ken Crawford, with the airline operating up to four return flights daily to Roxby Downs as an RPT service hosted by the Qantas reservation system, and recently doubling its Oxiana charter work to two services a day between Adelaide and Prominent Hill.

Consequently, the airline is increasing its Adelaide based fleet, with two more 56-seat Fokker 50s being acquired from Taiwan’s Mandarin Airlines and coming into service now, to take the local fleet to five Fokker 50s following the addition of a third aircraft last October.

Alliance has established an engineering base in the former Ansett hangar at Adelaide Airport and already the South Australian operation employs more than 50 people including flightcrews and engineers. Managing director Scott McMillan says the airline has achieved “a major strategic objective’’ in its first year’s presence in the state.

Nationally, it now employs about 320 people through its operational bases in Brisbane, Townsville, Adelaide, Perth and until recently Port Moresby, where it had a dry lease arrangement with Air Nuigini.

Alliance began operations in Queensland in 2002, when four aviation industry identities – McMillan, Aeromil’s Steve Padgett, New Zealand’s Hugh Jones and Briton Stephen Bond (owner of the UK based Bond Helicopters group), acquired the shell of Ansett associate Flight West, including its Brisbane base and most of the staff – but none of the debts – and two 100-passenger Fokker 100s owned by a secured lender to the Queensland company.

Later Chas Jacobsen joined the consortium.

Initially the new airline offered ad hoc commercial and tourist charter services, and continued a small RPT operation which was abandoned because of poor economics. Its first two resources customers were Zinifex and WMC (later gobbled up by BHP Billiton) and it quickly developed its resources industry business in Queensland before branching into Western Australia and South Australia.

Since start-up, it has added nine more Fokker 100s, all of them former US Airways aircraft, with the last three coming from UK aircraft engine manufacturer Rolls- Royce out of storage in the United States.

Of the Fokker 100 fleet of 11 aircraft, eight are based in Brisbane and Townsville and three in Perth for BHP and for a wet lease arrangement with QantasLink for scheduled services between Perth and the resources centres of Port Hedland and Karratha,to provide additional capacity.

In late June, Alliance was due to launch services between Brisbane and the coal mining and tourist centre of Mackay under another wet lease arrangement for QantasLink, enabling the national carrier to reinstate services it was forced to drop because of a shortage of pilots and to upgrade from a 72-seat Bombardier Q400 aircraft.

Under the Queensland deal, Alliance has dedicated a 100-seat Fokker 100 in its own livery to the route, using Brisbane-based crews, and its services complement Jetstar’s Brisbane-Mackay operation.

Narendra Kumar, head of Qantas regional airlines, said Jetstar was flying 21 return services a week with its 177-seat A320s, and Alliance had added 13 weekly services, for a gain of 584 seats on the route.

The Alliance operation had taken total Qantas Group capacity between Brisbane and Mackay to more than 10,000 seats a week, he said.

Scott McMillan says Alliance is delighted with its relationship with Qantas, which apart from providing work for his airline brings considerable on-carriage to the Qantas domestic network.

“We would certainly like to develop the association further,’’ he says. But there are no imminent prospects of other QantasLink routes.

The Queensland aviation company also undertakes charter work for the Australian Defence Force and the Department of Immigration. Its government roles include regular Fokker 100 services to Dili in East Timor and Honiara in the Solomon Islands, where Australia has peace-keeping forces, and it continues to provide some charter services for tourism operators, although tourism is a relatively small part of the business.

The resources industry work is the backbone of the operation. Apart from its services for BHP and Oxiana, Alliance boasts miners Xstrata, Zinifex, Newcrest and CopperCo, petroleum group Santos and fertiliser producer Incitec Pivot among its clients.

In its home state, Alliance operates out of Townsville to the Zinifex mine at Lawn Hill, near Mount Isa; serves the Ernest Henry mine at Cloncurry for Xstrata from Brisbane and Townsville; the Phosphate Hill fertiliser operation of Incitec subsidiary Southern Cross Phosphate; and links Brisbane to the remote Ballera oil and gas centre in the Queensland sector of the Cooper-Eromanga Basin for Santos.

Ken Crawford claims the airline has “the longest commuter route in the world’’ with the Newcrest charter contract between Brisbane and the mining group’s Telfer gold mine east of Port Hedland in WA. That is a distance of about 1700nm, which takes four and a half flying hours and a refuelling stop in Alice Springs westbound, but usually comes home to Brisbane non-stop in four hours “with a good tail wind. ’’ So far, recruiting and retaining flightcrews for its expanding services have not been a problem.

An advantage of the Fokker jets, Crawford says, is a relatively modern EFIS cockpit. It offers excellent experience for younger pilots for eventual transition to airlines flying A320s, he says.

Meanwhile, the diversity of routes and operations offers flying variety to established pilots.

The company is in the midst of a drive for more pilots for the Fokker 50 operations in SA at present – with the prospect for new pilots of advancement to the jet fleet later.

The airline is wedded to Fokker aircraft, claiming both the F100 and F50 offer excellent payload and range for their respective tasks and have proved their capability to operate without penalty in the high summer temperatures of outback Australia’s resources regions.

“They perform exceptionally well for us,‘’ Crawford says.

McMillan also cites strong customer appeal and “an outstanding reliability and safety record’’ for the two types. He is guarded on the questionof fleet expansion, but says the growing workload is likely to lead to a requirement for a further two Fokker 100s around the middle of next year. Europe is the likely source of the additional jets.

There is the potential to introduce Fokker 100s to the Adelaide-Roxby Downs route when a new airport is built, but there’s no timetable for that piece of infrastructure yet, and the present airport cannot take jet services.

Alliance supports its own aircraft, conducting heavy maintenance at its Brisbane Airport base, which is certified for major checks on F100s and F50s, and has the skills and spares and tooling inventories as well as the licences for the work.

The company also carries out line maintenance at the base, which incorporates a full crew facility.

It has additional full line maintenance facilities and crew bases in Townsville, Perth and Adelaide, and has just added Fokker 50 heavy maintenance work to the Adelaide base to support the swelling operations there.

Ahead, McMillan says the resources industry will remain the key market for Alliance, with a “well-established’’ business plan to exploit opportunities in the booming sectors in Queensland, WA and SA.

Although it has grown strongly, McMillan says Alliance has taken “a measured approach’’ to growth, and that will remain the strategy.

Apart from building on its existing relationships with mining industry customers, many of which are increasing their operations and needing more charter services, Alliance continues to scout for work at new and expanding resources projects around the country.

“Some major resources houses are talking to us about their requirements,’’ McMillan says. While no new contracts have been negotiated, McMillan says the prospects remain strong.

“It’s the general view that expansion in the Australian resources industry will continue,’’ he says. And the remote nature of many mineral and petroleum operations, including new ones getting underway or nearing government approvals, will offer opportunities for the Queensland group.

The six year growth path indicates that Alliance’s revenues have boomed but Scott McMillan will not reveal income figures. “We’re a private company,’’ he says simply.

“But we’re gone from two aircraft to 16 in six years, so that tells you something. ’’ o