History revisited – New England aviation, the final chapter

This column concludes my history of New England civil aviation with the story of the tumultuous air wars of the 1980s, air wars that were central to the reshaping of Australian civil aviation.

Under the Australian constitution, the states have legal control over civil aviation within state boundaries, the Commonwealth control over civil aviation between states.

In 1952, the Menzies Government passed the Civil Aviation Agreement Act establishing the two airline policy. The aim was to created a stable operating environment that would ensure services. In 1957, this policy was further strengthened. The aim, the Government said, was to ensure that there were two and not more than two operators on trunk line services.

It was this policy that set the scene for the Commonwealth Government’s unsuccessful attempt in 1961 to force East-West to merge with Ansett. Following the failure of the Ansett bid, East-West continued to expand, nibbling away at the edges of the two airline policy. By 1980, East-West was clearly the third largest carrier in Australia.

The growth of East-West encouraged new entrants during the 1970s, including Oxley Airlines (Port Macquarie) and Aeropelican (Newcastle). In Tamworth, Tamair/East Coast was expanding under the leadership of John Roworth.

East-West’s attempts to expand into the Northern Territory incurred losses that led to dissension on the Board. This opened the door in 1982 for Duke Minks and Brian Grey to acquire the airline with the assistance of a $7.5 million loan from the Nauru Phosphate Trust.

Three years later, the airline was sold for a substantial profit to Ric Stowe’s Perth based Sky West. Encouraged, Brian Grey would go on to found Compass with some what less than spectacular financial results.

Under both Grey and then Ric Stowe, East-West mounted an aggressive and ultimately successful campaign against the two airline policy. In 1987, the Commonwealth Government gave three year’s notice of the end of the policy, starting a scramble for aviation assets.

As part of this scramble, East-West was sold in July 1987 to a company jointly controlled by TNT and News Corp, the owners of Ansett. After twenty six years, Ansett had finally won.

Ansett’s takeover of East-West forced route divestiture. This opened the way for East Coast, later Eastern and then Eastern Australia, to expand. As part of this process, Australian Airlines acquired East-West’s 26% share of Eastern, gaining full ownership in1991.

The turmoil had major local impacts. Here I think of 18 September 1991 as a symbolic dividing line.

On that date, the Ansett controlled East-West announced that it was closing its Tamworth maintenance facility with the loss of 220 jobs and terminating all connections with Tamworth and the North. Two years later, the name East-West vanished from the skies, removed as a consequence of corporate change.

Eastern or Eastern Australia lasted until 2002. Then owner QANTAS merged all its regional carriers into an entity called QantasLink. Another proud New England name vanished from the skies, removed as a consequence of corporate change,

Man proposes, the market disposes; an era had ended.

Note to readers: This post appeared as a column in the Armidale Express Extra on 16 April 2014. I am repeating the columns here with a lag because the columns are not on line outside subscription. You can see all the Belshaw World and History Revisited columns by clicking here for 2009, here for 2010, here for 2011, here for 2012, here for 2013, here for2014.

The first post in this series is History revisited – introducing a flying history. From there, you can follow the story though.