Newcastle’s Williamtown Airport Again Eyes New Zealand Flights

Executives at Newcastle’s Williamtown Airport in Australia are keen for international flights to return to their airport and…

Newcastle’s Williamtown Airport Again Eyes New Zealand Flights

Executives at Newcastle’s Williamtown Airport in Australia are keen for international flights to return to their airport and once again eyeing flights to New Zealand. This is despite passenger numbers on trans-Tasman travel corridor flights generally not meeting expectations. However, the airport’s bosses argue New Zealand services are sustainable.

Newcastle Airport (NTL) is eyeing restoring international flights to New Zealand. Photo: Getty Images

Average passenger loads on previous flights to New Zealand

Newcastle (Williamtown) Airport (NTL) is a regional airport located 88 miles north of Sydney. The airport serves Newcastle, the second biggest city in New South Wales, and the surrounding region. Approximately 665,000 people live within one hour’s drive of the airport. In calendar 2019, the airport handled 1,274,000 passengers, making it Australia’s 13th busiest airport.

Primarily a RAAF base, the military long have shared their airport with commercial airlines. Those airlines, including Qantas, Jetstar, and Virgin Australia, have mostly focused on domestic operations at NTL. The airport only locked in its first international flights in 2018. Virgin Australia agreed to operate thrice-weekly Boeing 737-800 seasonal flights to Auckland (AKL) between November 2018 and February 2019.

Virgin Australia operated 71 flights over the 13 week period and carried a total of 6,687 passengers. Average loads on the Auckland-bound flights were 52% and 55% on Newcastle-bound flights.

Happier days in 2018 when Virgin Australia announced its services between Newcastle and Auckland. Photo: Virgin Australia

Newcastle Airport back on the hunt for New Zealand flights

Despite the less than stellar passenger loads, Virgin Australia and Newcastle Airport formalized a three-year agreement in 2019 to keep the flights operating. What, if any, incentives Newcastle Airport offered Virgin Australia to keep flying were never disclosed.

But the three-year agreement was torn up after the following 2019/20 southern summer flying season. In sharp succession, a trifecta of travel downturns, border closures, and Virgin Australia sinking into administration ended the flights.

By mid-2020, amid the downturn, Virgin Australia was on life support, and Newcastle Airport’s passenger terminal was deserted. A year later, the airline and airport are back in business. But Virgin Australia is no longer operating international flights, and Newcastle is back to handling domestic flights only.

However, the word is Newcastle Airport is back in the hunt for international services once again. As reported in New Zealand travel trade publication Travel Inc, the airport’s executives say discussions with airlines are “ongoing” and flights to New Zealand are “more than sustainable.”

Is Jetstar the most likely airline to fly between Newcastle and Auckland? Photo: Jetstar

Who would fly between Newcastle and Auckland?

There are four potential airline candidates, and you can rule two out right away. A smaller fleet and tighter strategic focus have clipped Virgin Australia’s wings.  You could presume when, or if, Virgin Australia does venture offshore again, the airline will eye other departure airports first.

“Virgin Australia has been on record saying that New Zealand is not necessarily a priority right now, so we are looking at options,” says Newcastle Airport’s Stephen Crowe.

Qantas has shown some adventurism with new routes lately. But the recent decision to fly to New Zealand from another secondary east coast airport (Gold Coast  (OOL)) burnt Qantas. You could safely bet Qantas won’t be lining up for round two.

That leaves Air New Zealand and Jetstar. Air New Zealand flies to multiple airports along Australia’s east coast, including several highly seasonal destinations. Despite experience in making seasonal routes work, Newcastle’s low profile, paucity of tourism pull factors, and proximity to Sydney may work against it. On the flipside, incentives can mitigate drawbacks.

The best fit is Jetstar. The cheap and cheerful low-cost Qantas subsidiary already has a substantial presence at Newcastle Airport and is well-known in both countries. The NTL-AKL route is primarily supported by leisure and VFR travelers – Jetstar’s core target market.

But with trans-Tasman travel not meeting expectations despite a travel corridor, whether any airline would risk their precious cash on international services out of Newcastle is debatable. As Air New Zealand’s Hobart (HBA) flights show, airlines will come if the incentives are high enough. But Newcastle Airport does not have the deep pockets of governments.

In the current climate, executives at Newcastle Airport may have a hard time luring international flights to their airport.

Source : Simple Flying More   

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Alliance Airlines: A Growing Player In Australia

Brisbane-based Alliance Airlines is emerging as one of Australia’s most successful airlines. The airline is one of the…

Alliance Airlines: A Growing Player In Australia

Brisbane-based Alliance Airlines is emerging as one of Australia’s most successful airlines. The airline is one of the very few airlines globally that made money in 2020. Alliance Airlines successfully dodged the travel downturn bullet and continued to grow with a focus on charter and fly-in-fly-out (FIFO) work and minimal exposure to scheduled passenger flights.

Alliance Airlines continue to grow and outperform many of its larger peer airlines. Photo: Alliance Airlines

A fast deal with Qantas helps underpin Alliance’s strong performance

These days, Alliance Airlines is best known for buying 30 former American Airlines and Copa Airlines Embraer E190s last year. Most are yet to arrive, but some of those that have landed were promptly wet-leased to Qantas in a three-year deal. Qantas now has options to take 18 of the 30 Embraers.

It is a slick move that will see Alliance Airlines bank checks from Qantas for some time. Alliance Airlines operates 52 aircraft, mostly jet and turboprop Fokkers. In the six months to December 31, the airline generated a profit before tax of US$20 million on revenues of US$116.2 million.

It is a small profit, but a profit nonetheless. Managing Director Scott McMillan attributed this to the underlying diversity and robustness of the airline’s business model.

Alliance Airlines will likely farm out the majority of its Embraer E190s to Qantas. Photo: Alliance Airlines

Contract flying underpins Alliance Airlines

Alliance Airlines has five important revenue streams. They are contract flights, wet-leasing, regular passenger transport flights, ad-hoc charters, and allied aviation services.

Contract flying refers to long term contract flying for corporate customers. Contract flying revenue grew last year to US$79.4 million and involved 13,106 flying hours. It is a core piece of business for Alliance Airlines. Much of the work is flying miners and other resource workers in and out of remote sites. Planeloads of miners will fly in for, say, two weeks of work before flying out for a week off. Multi-billion dollar mines require lots of workers, and the planes frequently come and go.

Last month, Alliance Airlines announced it would keep flying BHP Western Australia Iron Ore workers into the Pilbara for another two years. Alliance Airlines has been flying for BHP since 2009.

Alliance’s Australian network. Photo: Alliance Airlines

Alliance Airlines will fly services for Australia’s two major airlines

In addition to flying for Qantas, Alliance Airlines also has a history of flying for Virgin Australia. As Virgin gets back on its feet again after last year’s near-death experience, they want to use Alliance’s smaller planes to fly into airports where there’s not enough demand for a 737-800.

Alliance Airlines wet-leased aircraft to Virgin Australia up until last year. That relationship is to continue, notwithstanding Alliance’s recent deal with Qantas and that airline’s 20% stake in Alliance Airlines. The Alliance Airlines/Virgin Australia deal demonstrates Alliance’s independence from Qantas, despite that ownership stake.

Alliance aircraft will soon be flying on behalf of Virgin Australia as well as Qantas. Photo: Alliance Airlines

Mixed results for Alliance’s regular passenger transport flights

Less well known than Alliance’s FIFO and wet leasing flying is its regularly scheduled flying. It’s a smaller part of the airline’s business, comprising 2,567 flying hours in 2020 and generating just US$12.5 million. It was one segment of Alliance’s business model hit by the global travel downturn.

As domestic flying recovers in Australia in 2021, Alliance continues to dip its toes in regular passenger transport flights. In addition to flying to some regional centers, Alliance offers some interesting regular passenger flights out of airports like the Sunshine Coast (MCY) and is now the sole operator on routes such as MCY-Canberra (CBR) and MCY-Cairns (CNS). Alliance Airlines is quietly confident about its regular passenger transport flying with Australians stuck at home and domestic travel picking up again.

Ad-hoc charters are also shaping up as a useful growth area for Alliance Airlines. Last year, ad-hoc charter revenue was worth US$22.2 million, up 176% from the previous year. Alliance expects charter demand to remain strong. The airline has even got into the scenic flights business, offering dinosaur-themed scenic flights into Western Queensland. They’ve sold well, with extra flights later added.

The numbers are small at Alliance Airlines compared to many other airlines. But unlike most other airlines, Alliance Airlines isn’t drowning in a sea of red ink. Flying miners to the Pilbara isn’t as glamourous as flying long-haul first-class passengers around the world. But in 2021, it’s the former business model that’s proving the better one.  Alliance Airlines expects to better its 2020 performance this year.

Source : Simple Flying More   

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