Skytrans cease operation

A day after Rex picked up the regulated regional routes previously operated by Skytrans, Skytrans has voluntarily ceased operations.

The announcment was made on the airlines website this afternoon.

The companies remaining 67 staff were made redundant today and were paid out their full entitlements.

Managing Director Simon Wild siad in the announcement the company will now look at its options, but these do not include the return to passenger services in the short to medium term.

You can read the full announcemnt on the companies website www.skytrans.com.au

(I am currently away, but have broken into my break to bring you this news, as I feel it is importnant to the Australasian aviation scene)

Rex begins QLD services

As reported last year REX won the contract for several of the Queensland Government Regulated routes, beating out incumbent Skytrans.

The first service by Rex was today 1-January-2015 with the inaugural Western 2 service being operated by Saab SF340B VH-ZRH departing Brisbane shortly after 09:15AEST as ZL5662 to Wellcamp.  

This also marked the first service by Rex to Wellcamp, and the first of the regulated route services to Wellcamp, with Skytrains having previously serviced Toowoomba airport.

Rex Saab SF340B VH-ZRC at BNE in 2013

ZL5662 services the Western 2 route of Brisbane - Mt Isa via Toowoomba (Wellcamp) - Charleville - Quilpie - Windorah - Birdsville - Bedourie - Boulia

Today also saw the first Rex services on Northern 1 Longreach - Winton - Townsville & Gulf flights from Cairns - Mt Isa via Normanton - Mornington Island - Doomadgee

The Rise And Fall Of Airlines Fighting For Regulated Routes In QLD

The Queensland Government has announced the winning tenders to operate the Government subsidised regulated regional routes.

Winners

The big winner in the announcement is Regional Express (Rex) who have picked up three routes to add to their existing two, taking them to five regional Queensland routes.

Rex maintained their existing routes;
Townsville - Winton - Longreach (Northern 1)
Townsville - Hughenden - Richmond - Julia Creek - Mt Isa (Northern 2)

they have also added the following three routes;
Brisbane - Toowoomba - St George - Cunnamulla - Thargomindah (Western 1)
Brisbane - Toowoomba - Charleville - Quilpie - Windorah - Birdsville - Bedourie - Bouila - Mt Isa (Western 2)
Cairns - Normanton - Mornington Island - Burketown - Doomadgee - Mt Isa (Gulf)

All five of the routes will be operated by the Rex fleet of Saab SF340B aircraft, with the two Western routes operating through the new Brisbane West- Wellcamp Airport at Toowoomba.

Rex picked up Northern 1 and 2 in 2011.  The addition of Western 1 & 2 sees Rex return to scheduled services at Brisbane after an absence, however they have still operated FIFO and Freight charters from Brisbane, so have maintained a presence.

Qantaslink hold onto their two regulated routes;
Brisbane - Roma - Charleville (Central 1)
Brisbane - Barcaldine/Blackall - Longreach (Central 2)

These routes will continue to be operated by Qantaslink's Dash 8Q aircraft however both routes will see an up gauge with Central 2 up gauging to Q400 and Central 1 to Q300.

Losers

The big loser from this announcement is Skytrans who have lost almost all their regulated routes (to Rex) this comes hot on the heels of their loss of their Toowoomba - Sydney service which is ceasing due to the introduction of the new Qantaslink Q400 Wellcamp - Sydney services.

Skytrans cling onto life with their own services around Cape York and on the Cairns - Mt Isa route as well as their FIFO charters.  The Cape York network is as follows;

The Lockhart River, Coen, Arurkun services which operates the following different patterns on different days
Cairns - Aurukun - Coen - Lockhart River - Cairns (M)
Cairns - Coen - Lockhart River - Aurukun - Cairns (W, F)
Cairns - Lockhart River - Aurukun - Cairns (Tu, Th)

Mt Isa services
Cairns - Mt Isa (M-Tu, Th-F)
Mt Isa - Cairns (M, W-F)

The Edward River (Pormpuraaw) and Kowanyama service
Cairns - Edward River - Kowanyama - Cairns (M, Th)
Cairns - Kowanyama - Edward River - Cairns (Tu, F)

The Cape route to Bamaga
Cairns - Bamaga - Cairns (M-F)

The loss of the Western 1 & 2 contracts will see the end of Skytrans operating scheduled services from Brisbane however they will continue to maintain a presence through FIFO contracts.

Another loser in all of this is Virgin Australia Regional Airlines (VARA) who have for quite sometime been trying to get access into the Queensland regional routes, and have often been thwarted by the regulated route structure.  VARA tendered but did not win any of the available routes.  There only options for possible extensions to regional Queensland flying comes from existing routes or the below deregulated routes.
Time will tell if previous threats made by Virgin CEO John Borghetti to the Queensland Government regarding implications of the lack of access to the Queensland regions come to pass.

Start & Deregulations

All existing contracts end on 31-December-2014 with new contracts beginning on 1-January-2015.  

At the same time the following regulated routes, currently operated by Qantaslink  will be deregulated and opened to competition;
Townsville - Cloncurry - Mt Isa
Cairns - Horn Island
Cairns - Weipa

Learn More

Brisbane West Wellcamp Airport have welcomed Rex via a post on their Facebook Page

There is an article on the announcement from Brisbane Times reporter Cameron Atfield HERE

REX buck the Australian trend

Bucking the trend of fellow Australian operators and joining Air New Zealand in announcing a profit was Rex with a full year profit before tax of $10.7m($AUD) with a net profit of $7.725m ($AUD) this was down 44.9% on the FY13 net profit.

Despite posting a profit REX has warned that the Australian Aviation market is in deep crisis pointing to the losses made by Qantas and Virgin and listing the 16 different regional carriers who have collapsed and ceased operations since 9/11

Rex executive chairman Lim Kim Hai said the carbon tax, an increased fuel levy to fund the Civil Aviation Safety Authority and record fuel prices were all negative factors in 2013/14.

There were a few announcements of note in the release, FY14 saw REX take full ownership of its 51 frame SF340B+ fleet purchasing the remaining 18 frames that came off lease at the end of March 2014.

Its subsidiary Pel-Air has secured contract extensions for some of its SA based mining charter operations and has tendered for the dedicated search and reduce service for the Australian Maritime Safety Authority which will be announced later this year.  In FY14 the Pel-Air contract for fast jet support to the Australian Defence Force was also renewed by the Federal Government.  Pel-Air has also launched a number of SF340B+ flights in Queensland in support of resource sector FIFO operations.

Subsidiary Air Link began a Sydney - Cobar charter service in October 2013 and has also re-commenced RPT services this month, with a twice weekly SYD-DBO 1900D service.

REX is awaiting the outcome of its tenders to the Queensland Government to operate regulated regional Queensland routes which will be announced in October.  REX currently services the TSV-WIN-LRE* and TSV-HGD-RCM-JCK-ISA^ routes with a current contract end of 31 December 2014.  REX also launched a 3x daily SYD-ARM service on 28 March 2014 after an expression of interest period from local councils within a 600km radius of SYD, brought about by a network review and the recruitment of 11 former pilots of recently collapse competitor Brindabella Airlines.  

Read the media release, investor briefing and annual report as released to the ASX HERE


* Townsville - Winton - Longreach
^ Townsville - Hughenden - Richmond - Julia Creek - Mt Isa

Rex to cut routes?

 Australian domestic player Regional Express (Rex) has threatened to cut domestic services to regional NSW and VIC siting the federal governments lack of support for regional air services as a significant factor.

"The very high fuel price is making the situation quite untenable and all airlines are compelled to put in place rigorous measures to remain profitable,’’ Rex executive Chairman Lim Kim Hai said.

Flights from SYD to Taree, Grafton, Moruya and Bathurst, and from MEL to Griffith, Merimbula and King Island are under threat.

Read more about Rex from theaustralian.com.au HERE