There may not appear to be much upside for tourists from the surging demand for air services by resources companies, unless of course they’ve always wanted to take a break to the Pilbara, kick around the red dirt, and get a glimpse of some heavy machinery
There may not appear to be much upside for tourists from the surging demand for air services by resources companies, unless of course they’ve always wanted to take a break to the Pilbara, kick around the red dirt, and get a glimpse of some heavy machinery.
But that isn’t how Hugh Davin, the managing director of Skywest Airlines, sees it.
Mr Davin believes that by servicing the resources sector, Skywest can generate revenue streams that allow it to buy more airplanes and invest in its business. This, in turn, he says, will lead to increased capacity and services to leisure markets.
Mr Davin, the founder of charter company National Jet Service, took on the top job at Skywest in April, about three months after joining the airline as business development manager.
With 38 years in the aviation industry under his belt, Mr Davin has overseen a significant expansion of the company, which has grown from 240 staff to 360 as it looks to increase its opportunities.
The airline had been, he said, trying to do much with too few staff.
One important recruit has been Paul Daff, who left Qantas’ Jetstar to take on the role as chief executive officer at Skywest in February.
With the combination of charter and airline experience, the pair has begun growing Skywest’s presence in the resources sector and, aided by additional revenue streams the mining industry is helping to generate, it is increasing leisure services throughout WA.
“Skywest missed a lot of the opportunities coming out of the resources boom and the reason it had done that was because the focus wasn’t there,” Mr Davin said.
“They were focused on the regions it had typically looked after. But it is the wealth of the mining opportunities that adds value to our regional communities.
“We can buy machinery underwritten by the resources sector, which is not fully utilised and can be added into regional airline services to increase capacity to those markets.”
Mr Daff told Business Class Exmouth was a good example of how demand from the oil and gas sector was increasing airline capacity to the town, which at the same time was enjoying growing tourism attention on the back of Ningaloo Reef and the relatively new four-star Novotel Ningaloo Resort.
Skywest used to fly to Exmouth once a day; now it flies four times a day.
And Skywest’s capacity is set to increase with the introduction of its new fleet of 100-seat Fokker 100 jets, purchased at a cost of about $US20 million.
The jets are about twice the size of the bulk of its its main fleet, which consists of seven Fokker 50 turbo aircraft.
It is also in discussions to lease an A320 Airbus, which can seat up to 160 people.
The first Fokker 100 embarks on the new route from Kalgoorlie to Melbourne this week.
Linking regions to other Australian capital cities is another area in which Skywest is keen to expand.
Qantas has also joined the fray, recently putting on direct flights between Brisbane and Karratha, as mining companies fly in staff outside of a skills-starved Perth.
“That is the future,” Mr Daff said.
But direct flights between other WA tourism centres and the east coast cities similar to those that operate to Broome are a while off yet, Mr Daff said, because the volumes needed to increase substantially.
The airline’s assault on the resources sector has helped its bottom line, with revenue expected to climb between 30 and 40 per cent next financial year to about $140 million.
The airline is expected to post a net profit of between $8 million and $10 million for 2006-07.
Skywest was bought by Singapore’s Advent Air last year, which set about installing new management to try and reinvigorate the 43-year-old airline.
Mr Davin said Skywest used external consultants to help it restructure its operations, which was having a noticeable effect on its performance.
The airline has focused on increasing its on-time performance of aircraft; that is, arriving at the destination on time.
“We have gone from the lower end of the scale to one of the best performing regional airlines,” Mr Davin said.
“We have had high attention to detail in every aspect of what we do and put urgency into everything that we do, rather than the business just happening.
“The problem was that our people didn’t have much direction, but when we highlighted the problem they were keen to fix it. It was a matter of saying ‘get to your terminal on time because you never know when you might need that extra five minutes’.”
