Into the Fold

This was highlighted with the unveiling of the first Network aircraft to wear QantasLink colours on July 31, with Qantas confirming that the Network Aviation brand would be phased out. While Network will maintain its own air operator’s certificate (AOC) and manage the Fokker 100 fleet and crew, from the passenger perspective Network Aviation will cease to exist.

The move was foreshadowed in late 2014 when Network Aviation Fokker 100s were flagged for use on QantasLink regular passenger transport (RPT) flights. By March 2015 Network Aviation-branded flights were flying a number ofkey QantasLink routes, including Geraldton and Exmouth.

The integration forms part of an ongoing consolidation of the Qantas offering across Western Australia. An economic slowdown led by recent falls in iron ore prices has seen a changing marketplace, with less reliance on FIFO – fly-in/fly-out – mining sector flights.

With Network’s fortunes so closely linked with the health of the minerals sector, a shift of capacity to support Qantas RPT services was the logical next step for the airline.

“Network Aviation aircraft now spend around 50 per cent of their time flying airline services for the Qantas Group, while remaining at the front line in support of the resource sector,” observes Network Aviation CEO Hugh Davin.

Established in 1998 and commencing services the following year with two aircraft, Network’s success has been closely linked to the resources boom, which drove strong economic growth in Western Australia over the past two decades.

That growth in FIFO demand and the rise of Skywest, Skippers Aviation and Alliance mining charter services caught Qantas’s eye, which completed its acquisition of Network Aviation in 2011 and with it gained a substantial presence in the WA resources market.

Boom times

The brainchild of Lindsay Evans, Network Aviation was established to meet growing demand for high quality resources charter flights. It commenced flights in May 1999 with a Cessna 310 and a Cessna Conquest, marketing an emphasis on safety and high quality customer experience.

Evans had extensive experience in the charter industry, having worked as the general manager of Skippers Aviation prior to establishing

Repainting the F100 fleet with our QantasLink branding is the logical next step. JOHN GISSING

Network. This experience meant a strong understanding of the market, which assisted Network Aviation’s continued growth.

Network’s early services proved popular, and by the end of 1999 Beechcraft King Airs had joined the fleet, with the first Embraer EMB‑120ER Brasilia following in 2000.

Network’s first Embraer, VHNIF, entered service on February 10 2000, and like all the Brasilias that would follow, was converted to the extended range variant allowing it to operate on the longer charter services that are commonplace within Western Australia.

By 2002 the Network fleet had grown to include jets in the form of Cessna Citation IIs, with the carrier now operating charter flights and servicing long-term mining contracts operating regular FIFO flights with several mining companies.

But the main focus was the expansion of the EMB-120ER fleet, which would form the backbone of operations for much of the next decade – by 2010 there were six in Network colours.

The expanding fleet allowed for the establishment of Network Turbine Solutions (NTS), which handled maintenance and engineering services for the airline.

Headquartered at the domestic end of Perth Airport, NTS established a reputation of skill and expertise, particularly in the maintenance of the Embraer fleet.

Flying high

Perhaps the most significant decision made by Network Aviation was the choice to supplement the Embraer EMB-120ERs with Fokker 100 jets.

The larger size and greater range of the Fokker 100s allowed Network to expand its footprint to mining locations outside the range of the smaller turboprops.

The first Fokker 100 to join the fleet, VH-NHP, arrived in Australia on March 8 2008 in full Network Aviation livery. A second Fokker 100, VH‑NHO, joined the fleet in the following month.

As part of a wider fleet rationalisation, the EMB-120ERs were retained and given an interior refresh, with the Cessna and Beechcraft aircraft on-sold to leave Network Aviation with two aircraft types.

By 2010, Network Aviation had grown from a small charter operator to hold major contracts with large mineral companies including Aditya Birla, Consolidated Minerals and Xstrata Nickel. Behind the scenes, over 150 people worked with the airline covering pilots, cabin crew, maintenance and management roles.

The rapid growth of the airline was closely tied to the extraordinary growth in Western Australia, fuelled by the mining boom. With the industry valued at over $71 billion in 2009, and annual growth nudging 20 per cent, new mines in remote locations fuelled unprecedented demand for FIFO air services.

Both Qantas and Virgin Australia were poorly positioned to take advantage of this rapidly growing market, with the majority of FIFO contracts held by the then Singaporeowned Skywest and independent carriers Skippers and Network.

Virgin Australia initally established an indirect connection with FIFO flights via a partnership with Skywest. The agreement saw Skywest interline with Virgin Australia’s network, which allowed Skywest’s FIFO services to minerals-rich areas to connect via Virgin Australia to the east coast.

Qantas, meanwhile, had long had an intrastate WA presence via its QantasLink jet services, with first BAe 146s and then 717s operated by Cobham on its behalf, with flights extending to mining towns such asNewman and Paraburdoo.

However, while they took advantage of the growing traffic into and within WA thanks to mining operations, neither Qantas nor Virgin had the aircraft equipment or expertise to be competitive in the FIFO and charter market.

That all changed in late 2010, as WA iron ore production nudged 400 million tonnes for the year, when Qantas announced it had reached an agreement to acquire Network Aviation and with it, a significant share of the FIFO market.

A Qantas Group Airline

Announced on December 13 2010, the Qantas acquisition of Network Aviation represented a significant shift in the Western Australian aviation landscape. The deal gave Australia’s largest airline access to the state’s third largest FIFO carrier, and added two new aircraft types into the Qantas Group fleet.

“This is an important market, and a growth market, and Qantas will now become a key player in meetingthe needs of the resources sector,” Qantas CEO Alan Joyce said at the time. “This will significantly enhance the scope of what Qantas can offer the mining sector, bringing new competition to the marketplace… This is very much a strategic acquisition and an exciting growth opportunity for us. ” When the deal was completed early in 2011, Network Aviation became part of the Qantas Group. While the Western Australian carrier retained its own branding, as well as management, employees and operating structure, Qantas took an oversight role for Network’s safety, regulatory and governance functions.

More visible was Qantas’s move to aggressively grow Network Aviation’s fleet, with a commitment to acquire 10 additional Fokker 100s announced on February 17 2011.

“Our intention from day one has been to grow Network, and today’s announcement will increase its Fokker 100 fleet five-fold,” Joyce said at the time.

The Fokker 100 has certainly proven to be the workhorse of the WA resources sector, being the jet aircraft of choice for Skywest (now Virgin Australia Regional Airlines), Alliance and Skippers, as well as Network.

“The Fokker 100 has established itself as the benchmark aircraft throughout Australia for high capacity FIFO services. The aircraft has built a reputation on the back of its efficient and rugged design, low capital cost and exceptional uplift capability in hot, high and relatively short runway situations,” says Hugh Davin.

The newly-acquired Fokker 100s began to join the Network fleet later that year, with the first example, VH-NHG, arriving on December 22. By August 2013 the deliveries were complete with Network Aviation’s fleet comprising 12 of the type.

To complement Network Aviation’s FIFO flights, Qantas also established a QantasLink Bombardier Dash 8-Q400 base inPerth during 2011. Utilising two new Q400s operated by Sunstate, the aircraft were flown on the thenrecently deregulated Geraldton service, as well as supplementing flights between Perth and Learmonth.

In response to the ongoing minerals boom and Qantas’s presence in the FIFO and regional market, Virgin Australia announced its intention to purchase Skywest in October 2012.

Completed on April 11 2013, the deal saw Virgin instantly secure the largest aviation footprint in the minerals sector. It also allowed Virgin to integrate Skywest’s Western Australian regional network into its operations, which included a number of regulated routes.

Unlike Network Aviation, which initially retained its own branding and uniforms, Virgin Australia immediately moved to phase out the well-known and much-loved Skywest brand, with the airline relaunched as Virgin Australia Regional Airlines.

But just as Virgin’s acquisition of Skywest meant the minerals and resources market was now controlled by the two major Australian carriers, storm clouds were brewing.

Hard landing

Despite a smooth transition into Qantas ownership, since the acquisition Network Aviation has had its share of difficulties.

As if to symbolise the changing fortunes of the WA FIFO market, Fokker 100 VH-NQE was involved in a hard-landing incident after experiencing a strong microburst on approach to Nifty in October 2012.

Thankfully there were no injuries during the incident, but the aircraft was substantially damaged, with wrinkling to the fuselage skin and structural damage to the airframe.

Damage was severe enough that theaircraft ferried to Singapore’s Seletar Airport for specialist repairs with Fokker Services. It would return to Network service in April 2013.

2012 also signalled a shift in the fortunes of WA’s FIFO operations, with the first signs the resources boom was cooling off.

Western Australia’s mining industry was initially protected from these early signals, with more than half of the state’s minerals income tied to iron ore, which was still trading at well over US$100 a tonne.

However a cooling Chinese economy, which accounts for 77 per cent of iron ore exports, coupled with ongoing international competition, has seen a dramatic shift in the months and years since.

A fall in WA resource exploration during the 2012/13 financial year marked the beginning of the end of the boom, and today the iron ore price sits at close to US$50 a tonne.

By 2014 the slowing industry resulted in a number of mine closures across WA, while larger operations have reorganised their resourcing, with longer shifts and a greater reliance on live-in workers driving a reduction in FIFO flights.

Network Aviation has not been immune to these changes, and has faced a reduction of scheduled services and charters in recent times.

In order to adapt to the changing landscape, in June 2014 Qantas announced it would hand over Perth to Learmonth services to Network’s Fokker 100s, allowing them to be better utilised in the changing environment. This was made possible when Network Aviation achieved a regular passenger transport AOC and approval to operate into all Qantas RPT destinations in WA.

The following month the Embraer EMB-120ER fleet was fully withdrawn from service, leaving Network Aviation with a single, highly capable aircraft type.

What’s in a name?

The decision to utilise Network aircraft on the QantasLink network created a branding issue for Qantas.

While operating exclusively as a FIFO and charter airline had shielded Network Aviation from a name change, the appearance of Networkbranded aircraft on QF-coded services would ultimately result in the removal of the Network Aviation brand from WA skies.

The first visible sign of this change was noted in May 2014, when Network Aviation Fokker 100 VH‑NHK appeared with ‘A Qantas Group Airline’ titles added to its livery, with the rest of the fleet receiving similar treatment by year’s end.

Another significant shift occurred in March 2015 when QantasLink withdrew its Dash 8-Q400 fleet from WA. The two aircraft had been utilised on services to both Learmonth and Geraldton, and were replaced with Network Aviation jets.

This move was followed by a broader integration, with Network’s Fokker 100s being flown to destinations including Kalgoorlie, Karratha and Paraburdoo. This exposed more Qantas RPT passengers to the relatively unknown Network brand, causing confusion among business and leisure travellers.

The solution became apparent on July 29 when newly-delivered Fokker 100 VH‑NHY was spotted departing the Flying Colours Aviation paintshop in Townsville wearing QantasLink colours. The following day, Qantas officially announced that Network Aviation is taking on the QantasLink brand, with the entire existing fleet of 12 Fokker 100s also to be repainted in QantasLink livery.

The move brings an end to Network Aviation-branded flights, and sees QantasLink flights operatedby both Cobham and Network across WA, with Boeing 717 and Fokker 100 aircraft running alongside each other on RPT services under their respective AOCs.

At the time of the announcement, QantasLink CEO John Gissing said the rebranding of the Fokker 100 aircraft was an important step for Network Aviation as a member of the broader Qantas Group.

“Network Aviation has been part of the Qantas Group since 2011, and repainting the F100 fleet with our QantasLink branding is the logical next step for the brand,” Gissing said.

While the aircraft are being repainted, Qantas will take the opportunity to refresh their interiors, with updated furnishings to bring the passenger experience in line with other QantasLink services.

Looking ahead

Under the QantasLink umbrella, Network Aviation will continue to be a valuable part of the Qantas Group. The integration of theFokker 100 fleet into QantasLink RPT services offers the Group a low-cost airframe that performs well across regional routes.

“It is expected to remain a frontline option in both the FIFO and regional airline sectors for the next decade, and represents a low-cost solution which matches the performance of the new generation alternatives,” Davin said of the Fokker.

Certainly Network’s commitment to the Fokker 100 is growing, with one more to join the fleet before the end of the year (taking the total to 14).

Network Aviation is a child of the minerals boom, with its growth and sustainability in many ways linked to the fortunes of the WA economy.

However, under Qantas guidance, the airline has transformed into an invaluable part of the broader Qantas presence in WA. It allows the airline to hold over 30 per cent of the minerals market as well as feeding Qantas’s RPT network across the state.

Clearly Qantas’s 2011 acquisition of Network, and subsequent commitment to acquire additional Fokker 100s, was a key turning point for the WA-based company.

“These fleet developments enabled Network Aviation to transition quickly from being a respected but small provider of air charter services to the resource sector, to becoming the largest Perth-based specialist charter company,” Davin said.

“The company quickly pursued contract opportunities in a then buoyant marketplace and soon established a comprehensive portfolio of contracts in support of a number of large mining companies. ” While the resources sector may have cooled, a new Network has emerged that is a well-balanced carrier across RPT, FIFO and charter, and has become an important weapon in the Qantas Group armoury.