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Rise of the Regionals

A wave of small airlines is casting a new network across regional Australia

A fall in the price of smaller aircraft, upgrades in regional airports and a downturn in the FIFO (fly-in, fly-out) charter scene are the major catalysts of change in air travel throughout regional Australia.

The past 12 months have seen regional airlines giving the major airlines a run for their money, with such players as JetGo, Airnorth and Alliance Airline snaring their own space in the regional commuter market. Some, such as Alliance, are hunting new revenue streams as the FIFO market follows the decline in the mining boom. Others like JetGo are working on a point of difference: using Embraer jet aircraft instead of turboprops for smoother, quieter and faster journeys around Australia.

‘Australia is a small country, in a fast jet,’ says Jetgo’s managing director, Paul Bredereck. The company runs a small fleet of Embraer jets between regional centres including Albury, Wagga Wagga and Dubbo, flying as far north as Townsville and south to Essendon airport in Melbourne’s northern suburbs.

He told Essentials that small airlines are benefiting from historically low prices for quality used aircraft and changing social demographics that see families spread across the country as work and study opportunities open outside capital cities and people earn enough to pay for more frequent travel. The visiting friends and relatives (VFR) and leisure markets now make up about 65 percent of Jetgo’s passenger list.

On the whole it seems the major airlines are happy to step away from flying larger, half-empty aircraft on regional routes, leaving the smaller airlines, with smaller planes that can skip onto shorter runways, to operate full planes at a profit. Virgin Australia recently announced it is dropping its routes from Brisbane to regional Queensland and Port Macquarie, handing them over to Alliance Airlines’ Fokker 70s. VA will now codeshare on the routes while it continues to streamline its own fleet, reducing its holdings of turboprops.

The opening of the privately funded Brisbane West Wellcamp Airport, just outside Toowoomba, in November 2014 was a major boost for Darwin-based airline Airnorth. It has recently added three new seasonal flights on its Toowoomba-Melbourne route, taking it to 36 flights a week in and out of the southern Queensland airport alone. It also serves Perth and northern WA, NT and Queensland, and flies to Timor-Leste.

Luke Fisher, general manager commercial, also attributes Airnorth’s growth to ‘how flying used to be. People have become so used to paying for their baggage, paying for food. We provide old-fashioned service,’ says Fisher, adding that on Airnorth’s 76-seat Embraer E170 jets everyone has either an aisle or a window. ‘It’s our size and nimbleness, and we have a very strong community engagement.’

JetGo’s Bredereck is optimistic about the trend. ‘We see lots of opportunities in the future,’ says JetGo’s Bredereck, despite the recent decision to delay the start of its new Melbourne-Hervey Bay flights; now rescheduled for a spring launch. The company also plans to become the first operator to run scheduled flights from Illawarra Regional Airport (IRA) since 2008. Regulatory approval pending, it intends to fly from the IRA, 20km south of Wollongong, to Brisbane and Melbourne from October 2.