Slipping into history

The positive shareholder vote represents the satisfaction of another condition required to complete the proposed acquisition announced on the 30th October 2012.

The proposed acquisition still remains subject to certain conditions and regulatory approvals, including approval of Foreign Investment Review Board and the sanction of the High Court of Singapore.”

And so slips into history yet another airline in Western Australia’s fragmented and often chaotic airline industry.

Since 1960, just over 50 airlines have merged, failed to get off the ground or gone bankrupt either in WA or serving WA, underscoring the difficulty of making money in one of the world’s most hostile airline environments. Enormous distances, remote and small communities and harsh weather have made WA a graveyard for airlines.

Most failed airlines have been grossly underfunded.

Often with a business plan scrawled on a flying scarf, the Walter Mittys have crashed and burned.

Eight airlines have succumbed with something as “simple” as an air service to Rottnest Island 12 miles off the coast.

Skywest employees after 12 years of turbulent ownership can now look forward to new planes and long term security as Virgin Australia injects money and scale into the airline.

Virgin has grand plans for Skywest.

It wants to build the fleet of ATR72s and also invest in more A320s to service the enormous FIFO market in WA.

Skywest can trace it history back to 1957 as Air Culture which the merged into Nor’West Air Taxis Pty Ltd

“Skywest employees can now look forward to new planes and long-term security.”

And so began the merger of 25 airlines before the standalone Skywest Airlines emerged in 1980.

Skywest later took over East West Airlines in 1983 but the two airlines were absorbed by Ansett in 1987 in a bizarre transaction whereby the airline changed hands twice in a few hours via the Perron Group.

The CEO Bill Meeke was flying between Sydney and Perth and was asked on arrival if he had met his new owners to which he replied…”I haven’t met the previous ones yet.”

Such is the way of aviation in the wild west.

Mr Meeke was later involved in the purchase of Skywest Airlines in 2002 which had a small fleet of Fokker 50s from the Ansett receivers but he fell foul of the airline’s backers who wanted quick profits, while Mr Meeke wanted to expand with jets and tap the FIFO market.

Some of the airline collapses related to WA have been spectacular and bizarre none more so than SkyAirWorld.

Brisbane based SkyAirWorld, had been pushing the WA Government to totally deregulate the State’s regional air services in 2008 a move only thwarted by an alert State Minister for Transport.

At the same time it was losing $600,000 a week and had a net negative worth of $32 million it also won a Federal Government air service contact to serve Cocos and Christmas Islands from Perth in January 2009.

According to the second creditors report, SkyAirWorld which went into voluntary receivership in March 2009, just two months after it won the island contract – owes creditors $80 million, staff $4.5 million and lost $16 million for the six months to December 31.

At the time Nationals deputy leader and Northern Territory Senator Nigel Scullion said that “it beggars belief that the usual probity essential for a critical contract has not taken place”.

And it beggars belief that many politicians, despite mountains of evidence of airline collapses and mergers, still do not understand the airline industry and its needs such as airport infra structure.

Western Australia is fortunate in this regard with State Minister for Transport and Treasurer Troy Buswell acutely aware of the demands of the industry.

But with average growth of 9 per cent a year since 1963 –twice the word average – governments and infrastructure providers and going to have to be on their game if the airline industry in WA is to reach its full potential.