In the most significant management move of the past 10 turbulent years in Western Australia’s airline industry, Skywest Airlines has lured National Jet Systems Western Australian chief Hugh Davin to lead its drive into the resource sector.
In the most significant management move of the past 10 turbulent years in Western Australia’s airline industry, Skywest Airlines has lured National Jet Systems Western Australian chief Hugh Davin to lead its drive into the resource sector.
While much of the media missed the significance, the jubilation at Skywest Airlines was significant.
And so it should have been, for Skywest chairman Jeff Chatfield has pulled off the coup of the decade, according to one mining executive.
Almost forgotten by many, Mr Davin spent 11 years with Skywest before leaving in 1993 over concerns related to retaining the Coastwatch contract and the development of the resource market.
In 1994, he set up National Jet Systems (NJS) in WA with just two jets.
During the past 12 years, the fleet has grown to 18 jets based in WA – not to mention the fleet of aircraft engaged in the Coastwatch contract that Mr Davin secured in 1995, and which the company successfully renewed earlier this year.
During Mr Davin’s tenure at NJS, the airline secured jet contracts with most of Australia’s blue chip mining companies.
The company has also been contracted to operate a fleet of eight Boeing 717s for QantasLink, Qantas’ regional subsidiary.
Mr Davin declined to talk to WA Business News, citing confidentiality agreements with both NJS and Skywest, but insiders at NJS suggest he was “impressed with Skywest’s new owners, board and the evolving management team”.
Mr Davin was also attracted by Skywest’s low-cost model, thought to have achieved the lowest cost structure of any jet operator in WA.
Others suggest that a growing strength for Skywest is its regional focus built on a long history of serving the state.
The challenge for Mr Davin is that his work over the past 12 years has set NJS up for years with many long-term contracts.
Balancing that is Skywest’s aggressive plans for new aircraft such as the Airbus A320, which will be delivered next year.
In contrast, NJS, which is owned by UK based Cobham Group plc, had reviewed state-of-the-art Embraer 170s and 190s last year but couldn’t make the business case.
Skywest, under new ownership and board, has been steadfastly adding new types with a lease for four 180-seat A320s, to be introduced next year.
The airline has also been building a new management team, which includes chief commercial officer Mike Hoar.
The company has also aligned itself with powerful friends, with Singapore-based Tiger Airways CEO Tony Davis joining the board. Tiger Airways’ major stakeholder is Singapore Airlines.
Skywest Airlines has just added its seventh 46-seat Fokker 50 and the A320s will bolster its competitiveness against Qantas and Virgin Blue.
That Skywest move [A320s] was as bold as it was innovative, with Icelandic transport group Avion, which owns 61 aircraft, carrying the cost of the deployment and operation in a profit sharing after costs arrangement with Skywest.
The A320s will be placed on the Australian register and further aircraft may be added as applicable for seasonal work, if demand is sufficient, under temporary importation arrangements. Importantly, neither Advent Air – Skywest’s major shareholder – nor Skywest Ltd is exposed to the capital investment risk.
Skywest’s plan is to eventually deploy the A320s on Broome, Karratha and Darwin services releasing the three 96-seat Fokker 100s for more FIFO contracts.
In June, Skywest announced the new flights and schedules on its Broome and Darwin routes, and from July 24 the airline added three additional services to offer a daily return flight between Perth and Broome.
