Government move to secure regional air services

18/7/02
The State Government has moved to secure stable and sustainable air services in regional Western Australia.
Planning and Infrastructure Minister Alannah MacTiernan today announced the Government's Regional Airline Strategy, saying it would achieve a balance between sustainability and competition.
Ms MacTiernan said the strategy was based on the first report of a Review of Intrastate Air Services and would affect routes serviced by turbo-prop aircraft in the southern half of the State excluding Kalgoorlie, which was also competitively serviced by jet aircraft.
"The review found that only Geraldton could clearly sustain competition, but even this route needed some protection to enable cross-subsidisation of services to smaller centres," she said.
"Regional communities gave us a clear message that their primary concern was that we ensure that air services be maintained at least at their current level.
"Our aim is to develop sustainable competition, however we must take WA's particularly difficult regional aviation conditions into account.
"These include long, thin routes and relatively small regional communities mean that there will always need to be a level of cross subsidisation to guarantee that smaller centres are served.
"Intrastate passenger numbers are currently still 20 per cent lower than they were prior to September 11, 2001, even though SkyWest has heavily promoted discount fares. "
Ms MacTiernan said the Government would:

• invite applications for one new licence to service Geraldton and Kalbarri three times per week;
• not issue new licences for other routes for the time being, subject to the current service provider, SkyWest, guaranteeing service levels and fare structures;
• review the position in March, 2003, to examine any changes in conditions and see if and where more competition could be introduced;
• appoint a WA aviation industry observer to monitor SkyWest's performance and provide early warning of any significant changes in conditions;
• encourage partnering or other alliances with other airlines to deliver more efficient and cost-effective services;
• adopt a more rigorous approach to considering future licence applications, including requiring comprehensive business plans from applicants;
• actively seek co-operation from the mining industry to help improve regular passenger services in the Goldfields and Mid-West Regions; and
• pursue the Federal Government for more equitable treatment of WA in aviation policy and assistance.

"Skywest will be given an exclusive licence over its current network except in Kalgoorlie, and Geraldton," Ms MacTiernan said.
"Two regional airlines which have expressed interest will be invited to apply for a licence to service Perth, Geraldton and Kalbarri.
"We will review the situation in nine months to see if and where more competition should be introduced, unless there are significant changes in the regional aviation market before then.
"However, the review found that in comparable markets in North America, centres the size of those in WA were usually serviced by only one airline.
"In the Goldfields and Mid-West increased use of regular services, rather than chartered flights, by mining industry employees could increase the viability of these services."
Ms MacTiernan said the Review of Intrastate Air Services had included extensive consultation with regional communities and the aviation industry, as well as examination of interstate and international experience.
The second part of the review, which dealt with routes in the north of the State serviced by jet aircraft, would be presented in September.
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