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Transport & Logistics

WA’s resource boom takes to the skies

11 Jul 2013, by Informa Insights

Virgin Australia Boeing 737-800 at Canberra Ai...

Whether it be new aircraft, alliances or acquisitions Australia’s aviation sector has undergone significant transformation over the last few years. And nowhere is this changing landscape more evident than over the skies of Western Australia’s resource-rich regions.

In April, Virgin Australia acquired WA based airline Skywest. Skywest began service as Carnarvon Air Taxis flying charter flights in 1963 and was WA’s largest regional carrier by the time Virgin acquired 100% of the company. Fifty years later, the business had grown to include scheduled passenger services within regional Western Australia and Darwin, airfreight operations and both regular and ad hoc charters for customers including fly-in-fly-out services for a number of key Australian resource companies such as BHP Billiton, Rio Tinto, Chevron/Bechtel and Argyle.

Virgin wasted no time putting its stamp on the newly acquired business and to fast-track its presence in the high growth FIFO market, appointed Merren McArthur to the newly created role of Group Executive, Virgin Australia Regional Airlines.

Ms McArthur brings a depth of experience to the role having led the network and alliances business in Virgin Australia during a period of substantial growth and transformation. Prior to Virgin Australia, she held a number of leadership roles across Australia including Chief Advisor for Commercial at Rio Tinto Iron Ore and Deputy State Solicitor in Western Australia. 

Ms McArthur’s first job will be to integrate the Virgin regional and Skywest operations. Skywest aircraft will take on Virgin Australia branding and its staff will be retrained in the parent airline’s product and culture.

Merren McArthur Virgin Australia
Merren McArthur

“We believe there is a need for more competition on regional routes and our plan is to grow the current operations and expand our network to new destinations throughout Australia.” Ms McArthur said.

WA represents a key regional area for the aviation sector and as Virgin looks to leverage and expand its share of the growing resources sector, it’ll be interesting to see how this impacts passenger fares.

“But, as we believe we will, if we get traction out of the merger out of the two businesses and improved loads on some of the regional flying, that enables us obviously to offer lower fares,” she said.

In early June, only a month after the acquisition, Virgin Australia confirmed it will increase direct services between Perth and the Pilbara town of Karratha in Western Australia as a result of strong demand from the mining and resources industry.

“Karratha is one of the fastest growing mining towns in Australia and these new flights from Perth are being added in response to strong demand.  We have listened to our customers and they were asking for additional frequencies, particularly in the morning peaks,” said Ms McArthur.

With these additional services, Virgin Australia will offer 34 flights per week between Perth and Karratha. The newly enhanced regional operation currently has 32 aircraft operating over 800 services per week to 41 different destinations.

“Following the recent integration of Skywest Airlines into the Virgin Australia Group, we now have a strong West Australian base and focus which enables us to quickly identify and respond to growth opportunities in the region, particularly in the high-growth fly-in-fly-out markets. We will continue to review market demand and look forward to growing our regional services right across Australia”, McArthur added.

WA_272x70In 2012, an estimated 739,000 bi-directional O&D passengers travelled between Perth and Karratha, up 25.9 per cent on the previous year.  Virgin Australia still faces strong competition from Qantas which currently offers an average of eight flights a day from Perth to Karratha and what’s the difference in fares?

According to Webjet, a one-way flight from Perth to Karratha will cost from $623 with Virgin and $627 with Qantas.

Merren McArthur will be delivering a talk Virgin’s aviation strategy for WA at the WA Transport Infrastructure Summit in Perth on 13 August 2013.

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