Issue 724

Editorial

with Simon Thomsen

Time to return to earth

Depending on when you need to fly to Sydney, a return trip will cost you anything from $250 to $640.

And from June 17, people with an eye for a bargain, who can be bothered driving 70 minutes North to Coolangatta, will be able to fly one-way with Virgin Blue for only $55.

That's great for consumers, but the problem for regional airline operators is that cheap tickets will quickly send them broke. Doing it with a half-empty jet will send you broke twice as fast - that's what happened to Impulse.

So while Ballina might be disappointed by Ansett's change of heart on a promised jet service, last week's announcement that Hazelton will take over is good news for the whole region.

The rules of aviation have changed dramatically since Ansett made its promise to Ballina and the town needs to face those facts. A few months ago, Ansett itself almost disappeared in a serious crisis with the Civil Aviation Authority.

Other problems beyond the company's control also developed over the past year.

The dollar has plummeted, pushing up the cost of aircraft leases, which are in US dollars. The price of fuel, a major cost in air transport, has gone through the roof. And competition has seen already slim margins vanish. Rival Qantas added another 70,000 seats to the market when it began flying the Sydney-Ballina leg in March last year.

Ansett's Ballina service was losing money because not enough people were paying enough money for it. Ballina is a very different airport to Lismore. Despite boasting 120,000 passengers and one of the fastest growing markets in NSW, the people who fly into the coastal town are predominantly from what's called the leisure market. They'd like to visit Byron Bay, will happily pay a couple of hundred dollars to do it, but not too much more.

Lismore, with 50,000 passengers, is a business airport. If you've got a job to do in Sydney, need to get there at the last minute and return the same day, then you're prepared to pay $600 for the privilege. Lawyers, health and government officials and a range of professional people fly from Lismore paying good money. It makes the service viable and Lismore Council's airport terminal an extremely wise investment to maintain the city's status as regional capital.

Casino, with 10,000 passengers, is also a significant market, and that patronage has been rewarded with continued flights from Hazelton.

Surveys have shown that the most important issue for passengers is a regular service. Given the choice between two flights a day in a jet, or more frequent flights in a smaller turbo-prop, they'll take the latter option. That's why this decision makes good sense for both the region and airline.

The Northern Rivers is extremely lucky to have three airports servicing Sydney, all within 60 minutes drive of each other. The region has also been lucky that Hazelton's regional manager, Maurice Gahan, is based in Lismore and knows the towns and their potential. He has been instrumental in developing a clever range of frequent flights using all three airports. The added bonus is Port Macquarie, where a range of synergies, including a Southern Cross University Campus, exist, offering improved business links.

Had the decision to rationalise services been made by a Melbourne-based manager looking at the map and balance sheet, the result could have been very different. And more than one local airport would have been left feeling truly betrayed.