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Uncertainty about Darwin-based Airnorth’s future as its parent Bristow Group tries to stave off bankruptcy has prompted independent carrier Regional Express (Rex) to consider operating in the Northern Territory.
Rex deputy chairman John Sharp said he would lead a delegation to the NT in coming weeks to talk with key stakeholders after the Rex board discussed the option at a meeting on 23 May.
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“Following Airnorth’s parent company, Bristow Group, going into Chapter 11 in the United States, many concerned stakeholders have approached Rex to ensure the long-term viability of regional air services in the Northern Territory.” Sharp said in a statement on Monday.
Bristow Group announced on May 13 that it had voluntarily filed for Chapter 11 protection of its US and Cayman Island entities in the United States Bankruptcy Court in the Southern District of Texas so it could restructure its balance sheet to alleviate debt and continue to provide aviation services to clients.
Airnorth is not included in the Chapter 11 scheme and continues to operate in a business-as-usual scenario.
Eastern Airways, Bristow’s Scottish carrier operating out of Aberdeen was not in Chapter 11 either, but immediately after Bristow announced the bankruptcy protection it sold Eastern to Orient Industrial Holdings, controlled by Richard Lake, one of Eastern’s founders.
Lake and Brian Huxford sold Eastern to Bristow in 2014 in a multimillion-pound deal.
“The Rex Board is sympathetic to the plight of the Territorians and shares the views of the concerned stakeholders who believe that Rex would be the best chance for the NT to have a sustainable, quality regional air service with affordable fares,” Sharp said.
Sharp cited Rex entering Western Australia for the first time after winning a tender for routes between Perth and Albany and Perth and Esperance from February 2016 as an example of the regional airline saving services that were dropped by Virgin Australia Regional Airlines (VARA).
“These routes were abandoned by the previous operator on the grounds that they were highly unprofitable,” Sharp said.
“Today, Rex is profitably servicing these routes with more flights, lower fares, greater passenger numbers and better reliability, at a time when the rest of the regional routes in WA are experiencing decreasing passenger numbers and rising fares.”
Rex presently makes 75,000 flights a year to 60 destinations in Australia, with about 55 Saab 340 aircraft.
It also owns air-freight and charter operator, Pel-Air Aviation and the Australian Airline Pilot Academy.
If Rex does start services in and out of Darwin, the only state or territory where it will have no representation will be the Australian Capital Territory.
It ceased flying between Canberra and Sydney in December 2004 after racking up $9 million in losses on the route dominated by Qantas.
At the time, then managing director Geoff Breust cited a lack of support from the federal government and the significant cost of using Canberra Airport as reasons for ending the route.
Lechuga
says:I think they need new planes before expanding, think they need more planes ontop of that too.
Harrison
says:I think that Tigerair should also think about more Northern Territory flights like flights to Uluru Ayers Rock or more flights to Darwin
Ro
says:Harrison,
Tiger will not base any aircraft in the Northern Territory in the near future, as they could get better revenue per aircraft in the eastern states. Unfortunately, its all down to economics of the business, if the aircraft was based in NT they could maybe get 4 to 6 flights a day/per aircraft vs 6 to 10 flights a day/per aircraft in the eastern states. Plus revenue per flight unit is higher in the eastern states as well due to the larger market and with more flights they can also get more ancillary revenue per passenger too.
The only way it could happen, is if the NT Government or Airports provide Tiger an incentive deal to base aircraft or operate more flights to NT. But, it would be more likely that Virgin (Tigers parent company) would want the incentive deal and keep tickets higher across the country, as it would benefit them more and not create a price war if these incentives were allocated to Tiger.
As much as it would be great for Virgin to allow Tiger to base aircraft in NT, it would be more likely when Tiger gets more planes in the fleet, only if Virgin allows to size of the Tiger fleet increase from 15ish aircraft today to say 30ish over the next few years can I see this happening, but fingers crossed anyway.
Michael Beech
says:Why doesn’t Rex fly, Perth to busselton,they just finished all new runway,now busselton Shire pushing for airlines to start new roots from Melbourne east coast and international
Steve
says:Perth to Busselton is too easy a drive nowadays. Even before the new highway was open it was not really a viable run – a couple of operators have tried.
Martin Breen
says:Well if REX take over from Air North I hope they will buy some of their Embraer jets, I don’t feel like going back to Turbo Props on the Darwin-Dili flights.
TD
says:You won’t immediately. Centrelink is the go because you won’t be able to afford to stay in the top end unless you want cadet pay. That’s the reality of it for numerous reasons. Maybe some wealthy locals or mining magnates and government assistance will offer to keep the Territorian Airline in local hands again! Might keep all the vultures and their hidden agendas away, Time for a consolidated think tank!