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Australia's regional aviation services get boost with launch of RegionalLink Airlines

Travel News Asia 1 March 2004

A major new force has arrived in Australia's regional air transport industry with the launch today in Adelaide of RegionalLink Airlines, a national coalition of carriers which will operate under a single brand, and will share core functions including reservations, purchasing, yield management, airport services and information technology.

The new group, owned by Darwin-based Capiteq Ltd, aims to become the lead franchisor to a range of participating regional airlines by the end of 2004, operating flights throughout regional Australia.

The Chief Executive of RegionalLink Airlines will be Ian Mitchell, who has 31 years experience in the aviation and tourism industries, most recently as Qantas Group General Manager, Australia Sales, and as Managing Director and Chief Executive of the Northern Territory Tourist Commission from October 1992 - October 1994.

The first members of RegionalLink Airlines are two Capiteq subsidiaries, the Darwin-based Airnorth Regional and Airlines of South Australia, which was acquired late last year.

A third carrier, Adelaide-based tourist and charter airline Emu Airways, has just been acquired by Capiteq, and several more airlines, including O'Connor Airlines of Mt Gambier, South Australia, have entered preliminary discussions to become RegionalLink franchise partners - the first example of franchising in the Australian airline industry.

"Regional aviation in Australia is at a significant crossroads, and carriers need a fresh approach to ensure their ongoing viability," said Mr Michael Bridge, Chief Executive Officer of Capiteq. "This industry is comprised largely of independent carriers, each facing significant costs and challenges, and many lacking the funds to invest in the latest and most efficient airline technology, such as latest yield management systems or reservations centres."

Mr Bridge said the aim of RegionalLink Airlines was to bring stability, sustainability and profitability to the regional air transport sector, by reducing costs for member airlines and improving efficiency through sharing of resources and group investment in new technology.

Although independently owned, the founding RegionalLink carriers are all commercial partners of Qantas.

At a launch ceremony at Adelaide Airport today, RegionalLink Airlines unveiled the first two aircraft in its new blue and silver colour scheme - both 15-seat Embraer Bandeirantes from the Airlines of South Australia fleet. A 30-seat Embraer Brasilia from Airnorth and two Piper Chieftains from Airlines of South Australia are due to be completed by the end of March.

Mr Bridge said RegionalLink Airlines would not operate aircraft in its own right, but would be the owner of the group brand, and provider of core services such as centralised reservations, yield and revenue management, information technology and other services to each of the franchised airline operators.

RegionalLink also would provide a single flight designation code, to be used by all member airlines, and would negotiate the procurement of supplies and services for members, obtaining discounted pricing for items including fuel, insurance and common spare parts. 

The first, of what is believed to be a number of key contracts was announced today with Sydney-based software company R&R to provide its Aviator revenue and yield management technology to the RegionalLink group. The Managing Director of R&R, Mr Ian Johnson, said the combination of cost savings provided by the RegionalLink concept and the implementation of revenue management across all carriers in the group would give the new venture a very strong financial foundation. 

"Although RegionalLink partners will paint their aircraft in a group colour scheme, all aircraft in the group will carry the logos of the participating airlines, continuing to keep alive the strong heritage and branding upon which these carriers have been built," said Mr Bridge. "The most important outcome will be more viable air services for rural and regional Australia, and a strong single brand, as members of the RegionalLink Airlines group begin to reduce their operating costs and reap the benefits of a combined approach."

Mr Bridge said Airlines of South Australia had achieved reductions of over 20 per cent on fuel and insurance costs since its acquisition by Airnorth last October. "This is just the start," he said. "Reductions of this size by combining the requirements of just two regional airlines demonstrate clearly the significant potential savings and efficiency gains to be achieved when many more carriers unite under the RegionalLink Airlines brand."

Airnorth has a fleet of nine aircraft - six 30-seat Embraer Brasilia and three 19-seat Metroliner 23s - and operates scheduled services across northern Australia from its Darwin hub to six NT destinations - Katherine, Tennant Creek, Alice Springs, Maningrida, Gove and Groote Eylandt, plus two in WA - Broome and Kununurra - and internationally to Dili, East Timor.

Airlines of South Australia operates six aircraft - one 30-seat Embraer Brasilia, two 15-seat Embraer Bandeirantes and three nine-seat Piper Chieftains - on scheduled services from Adelaide to Port Lincoln and Port Augusta. It also operates significant charters throughout South Australia for major commercial clients, as well as the world's longest mail run, through the South Australian and New South Wales outback, as far as the Queensland border.

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