Regional aviation issues are complex, they run deep across ageing aircraft, escalating costs, fewer passengers and the ability to retain and attract key staff. Those are four of the key issues, but it does not stop there and every day is a combination of operator survival and having numerous ways to spend the same dollar! Yet, we can avoid a “public bus network in the sky”.

As a regional aviation expert I look at how strategic operating models can be strengthened to create effective new private and public sector government investments and how current, budgeted OpEx can be used better to resolve ongoing and worsening regional aviation issues and challengesl.

With the right model and industry structural changes, new investment opportunities do exist. The broad, declining position of Australia’ regional aviation industry can be turned around, new aircraft can be introduced, existing operators can survive, and prosper!

I know how best to underwrite critical regional air routes, and how to make the case that an airport and airline asset in the middle of nowhere is a critical piece of national infrastructure. I have done much international benchmarking and I connect with other regional aviation experts around the world. Canada, NZ and Scandinavia are well ahead of where Australia is in efforts to secure viability and long-term sustainability across regional aviation routes and networks.

Many regional airlines and general aviation operators have very old aircraft that just keep being maintained. That can only be done for so long, spare parts costs more and they are getting harder to get. At some point, the aircraft needs to be replaced, I can help airlines, operators and governments set a clear pathway to execute effective fleet and network strategies. This is one part of regional aviation where new investments can be secured.

Regional airlines face significant additional costs, it simply does not stop from all angels. Some of it you can’t control, you can only plan for it. Effective cashflow forecasts are key to survival and growth. Alas, many regional and general aviation operators have long lost the ability to find capital to upgrade ageing aircraft fleets. This is solvable and it does not mean public sector obligations that involve aircraft holding companies and aircraft ownership.

Regional airports are part of critical national infrastructure. Detailed, current assessment of the CapEx debt and, levels of catch-up CapEx investment needed to overcome Infrastrucutre deficits at many regional airport is needed urgently. Potential changes to regional airport ownerships could improve day-to-day financing to support operations and upgrades across many regional airports.

Aviation is a complex industry, but often problems can be fixed with a bit of critical thinking and know-how. It’s about understanding what’s influenced a situation, and it’s about taking a step back, critically assessing the problem, and finding a common-sense solution.

Here to help.

My recent experience across a large recent regional airline administration in Australia was complex and the rebuild work cut across all of the key issues facing regional aviation. The Federal government nearly owned this airline, as a buyer of last resort to maintain much essential regional connectivity.

The airline had multiple technical problems with old aircraft, chronic underinvestment across the business, high staff attrition and severe demand on limited cash. A large portion of the fleet was parked, the airline’s long term reliability and on-time-performance metrics have been awful for customers and stakeholders.

All of this impacted customer demand, because the airline wasn’t seen as reliable. Would the flight turn up? How could the fleet be more reliable?
The project quickly moved beyond due diligence to thinking about how to create a financially viable regional aviation business that could then commence a CapEx project to refleet this regional airline with alternate aircraft.

As part of this project we conducted an economic analysis of airport infrastructure, including policy perspectives, and recommendations to deliver better services and connectivity for Australians.

In our analysis, we found that regional airports were mostly transferred to local councils with financial terms set in perpetuity. This left councils without sustainable funding, or a blueprint for how to run the airport. At times the airport manager was also the infrastructure manager, flipping public sector cash between roads, amenities and runways!

A decision made decades ago is having ramifications today, leading to significant regional airport infrastructure deficits with many runways and aprons approaching end-of-life status. This is one example where larger aircraft options do not work easily, it is also an example where regional airlines will be unable, in almost every case, to pass costs for runway upgrades, new terminals and security screening onto their diminishing passenger cohort.