After the gold rush

image: © Civil Aviation Safety Authority

As the minerals boom wanes, mining charter and offshore operators face a new set of safety and operational challenges.

A leaner mixture

Just a few short years ago the boarding lounges of Perth Airport were a riot of fluorescent colour as thousands of fly-in-fly-out (FIFO) workers queued for their early morning commute. The queues are shorter now, and the airport coffee slightly cheaper, as a historic mining and energy construction boom settles into the quieter production phase. (More telling is a 67 per cent fall between 2012 and 2016 in Karratha house prices, as reported by ABC News.) Outside peak times, the specially built FIFO terminal at Perth Airport is a traveller’s dream, with the steady trickle of passengers able to walk straight up to the check-in desks.

From an aviation point of view, the minerals boom of 2003-13 was a time not only of manic growth, congestion and the operational stresses that go with those, but also a time of unprecedented cash flow. Aviation operators in proximity to the mining sector were transformed; Network Aviation, of Perth, for example, went from operating a piston twin and a turboprop twin in 1998, to being a Qantas subsidiary with 14 Fokker 100-seat jets by 2015. Skywest expanded from seven aircraft in 2004 to 24 aircraft, including two Airbus A320s, used for FIFO charter, and became a subsidiary of Virgin Australia. It is now Virgin Australia Regional Airlines (VARA). Alliance Airlines, since its arrival into Perth in 2006, has gone from two Fokker 100s, to a fleet of up to 11 Fokker 100/70s in the region.

In Perth, there’s a sense that the easy money has gone. Weekend newspaper features about the end of the boom speak of high-performance utes being traded on modest family cars, and of a glut of second-hand jet skis. Aviation providers say they have not had to take such desperate measures, but they are now dealing with the pressures of transition, made more difficult in the offshore helicopter sector by the grounding of a fleet workhorse, the Airbus Helicopters H225 (formerly Eurocopter EC225).

Costs have become an issue again. ‘We have been looking at our contracts in fine detail,’ says Bristow Helicopters engineering manager Neil Seabrook, ‘going over them line-by-line to see where they may have blown out in the good times and paring things back to align with the contract’.

But aviation consultant and former airline executive, Bill Meeke, says the end of the boom is in some ways a relief. ‘At 4 o’clock in the morning there were aircraft parked on every available stand at Perth airport. There was just no more capacity,’ he says.

‘This went on all day and if you were negotiating with a mining company to put together a contract for air services the biggest issue was where you would get a (departure) slot from. It had reached the point where there were no more slots; it was at saturation. Something had to give and it was the mining boom that let go.’

Western Australia manager for Alliance Airlines, Russell Bryant, says, ‘There’s been a substantial drop in passenger numbers to Newman, Hedland and Karratha, the “golden triangle”,’ he says.

Alliance still operates more than 100 weekly FIFO flights from Perth in what Bryant calls ‘still a very robust business’; however, interstate FIFO flights are sharply fewer, as mining companies no longer scrambling for labour tighten up their ‘point-of-hire’ contracts to prefer workers based in Perth.

Seabrook says the global nature of the current slump is an unwelcome novelty. ‘In the past, we’ve seen more regional than global downturns, and we’ve benefited from moving people around,’ he says. ‘We’re not having that so much in this downturn because it is global. Having said that, we are still able to lean on the Americas to furnish wet-leased aircraft to do work in Australia that we couldn’t do locally.’

Bristow has diversified, taking over fixed-wing provider Airnorth, and globally increasing its presence in search and rescue operations. ‘It’s a long-term market and one we’ve traditionally been very good at,’ Seabrook says.

A spokesperson for South Australian-based Babcock Offshore Services (formerly Bond Helicopters) emphasised that the company had a wide portfolio in defence and engineering services. ‘This means that although a downturn in an industry may cause a challenging business environment for some, the diversity of our wider business ensures that essential resources such as those to support safety aren’t affected,’ they said.

Alliance is expanding into New Zealand, looking at the luxury tourism air charter market, and diversifying into aircraft parts and aircraft sales, following its bulk purchase of Fokker aircraft from a European operator. ‘We’re trying to make our business robust.’

Bryant says the major business change from the height of the boom is how the mining industry has become cost conscious. That creates an interesting dynamic tension, he says.

‘They also know there’s only so far you can push in terms of cost. They have a responsibility not to push to the extent that affects the performance of the business and our responsibility is to push back if ever it gets to that stage.’

Safety culture: a shared understanding

What has prevented the end of the boom from becoming a covert safety risk is the safety culture that aviation and the extraction industries, particularly oil and gas, nurtured and shared during the years of prosperity. The crossover of oil and gas safety culture into aviation was a strong theme in Flight Safety Australia’s 2011 story at the height of the boom, and this attitude has endured despite tougher times, industry managers say.

‘It’s been consistent, always driven by the mining companies, oil and gas, as part of their expectation,’ Bryant says.

Bristow engineering manager Seabrook says, ‘we’re aware that it’s different now to when it was buoyant and we pushed out a lot of safety initiatives. But we’re not withdrawing any of those initiatives. We still have a firm commitment to things like our sterile maintenance policy, for example.’

CHC helicopters regional director Asia-Pacific, Nick Mair, says it is a false idea that customers are less worried about safety in tight economic times.

‘I haven’t seen any sense that “today’s story is money, safety is yesterday’s story.” That’s testament to a mature customer base,’ he says.

Bryant says FIFO providers have learned about safety management in their own operations from their dealings with mining companies.

‘We are very much aligned with mining company safety programs. We learn from each other,’ he says. ‘We do a monthly report to our major mining clients in regards to our safety management system, any incidents with findings that could be relevant.’

‘You find also that there’s a responsibility for the aviation side with a lot of mining companies because they are the operators of the airports,’ Bryant says. ‘Their attitude to those airports is very serious. So the miners are both providers and consumers of aviation services. They have skin in the game.’

Bryant and Meeke say FIFO passengers are an unappreciated part of the safety equation.

‘Our FIFO passenger is not an RPT passenger going to Bali for a holiday. They are disciplined, they don’t drink and their employers are very strict,’ Bryant says.

‘Your customer base knows what they’re doing,’ Meeke says. ’They know that if they’re not there by close-off time, then they’re off the manifest. The passengers are far better educated and skilled at being transported efficiently.’ He describes it as an operational advantage that translates into a safety advantage. ‘If, heaven forbid, an aircraft had to be evacuated, you probably wouldn’t see these passengers reaching for their hand luggage.’

Downdraft: losing a type

A business downturn is only one of the problems for the offshore helicopter sector. The crash in Norway of an Airbus Helicopters H225 (formerly Eurocopter EC225) in April 2016 led to the type being grounded. At the time of writing there was no indication on how long the grounding would continue, nor any indication whether the separation of the rotor from the crashed helicopter was due to an aspect of the helicopter’s design, or a combination of circumstances.

Although the investigation is yet to present its final report, one detail that has emerged was that the crashed helicopter’s main gearbox was involved in a road accident while being transported in Australia. It was inspected by Airbus Helicopters and returned to service.

Seabrook says it’s a moot point whether the timing of the grounding is fortunate, or unfortunate. ‘We have lost work, with nine aircraft parked, and there’s no real end,’ he says. ‘There’s never a good time to ground an aircraft and it certainly hasn’t helped us, but equally it could have happened in a boom when we were screaming for aircraft. I suppose it could have been worse.’

Bristow deputy head of flight operations, Tony Ferris, said the grounding turned a business downturn into a perfect storm. ‘Our difficulty now is planning for new work with a new aircraft. The lead time and planning and expense associated with that is finely balanced.’

The 225 has been a popular aircraft with offshore operators. ‘It can do what no other helicopter can do,’ Seabrook says. ‘Other aircraft don’t have the payload and range.’ Mair puts it bluntly: ‘Other types doing the same flight have to leave two or three passengers on the beach.’ And Ferris’s personal opinion is it would be ‘a crying shame if it was retired’.

Mair says the H225 grounding brings its own risks, which need to be managed. ‘Customers are saying, “can you work with us to see if we could have another helicopter than just relying on one, the Sikorsky S92, and what would that risk profile look like?”’

‘Should we be considering new “super medium” types such as AgustaWestland 189s and Airbus H175s? We’ve said we’re happy to entertain different types, but we need to set an expectation, which is we have no way of knowing if a new type is good, bad, or indifferent. With the lack of data in the operating environment that’s a fact, but if you look at history, seamless helicopter introductions are not common.’

Lessons from the heady days: growth, communication and commitment

The mining boom was an era of exhilarating growth for aviation in northern and western Australia. Meeke says rapid growth in an organisation can bring its own hazards, one of which he encountered as a manager of an aerial surveillance operation.

‘The bigger the organisation, the more well-meaning filters there are between the coalface and the boardroom,’ he says. “I found they were well meaning because if something happened it was reasonable for middle managers to say, “he doesn’t need to know about this; I need to manage it”.’

‘But I became increasingly nervous, so I decided to set up a safety committee outside the normal safety structure. The committee was comprised of frontline personnel, a pilot, an engineer, a flight attendant, a baggage handler. There were no minutes, but anything that came out as a safety issue would be my responsibility.’

The first meeting began with an extended awkward silence. Then a worker asked if Meeke knew something everyone in the maintenance hangar did: life rafts on aircraft were failing during tank exercises. ‘It was awash in the swimming pool; there was no way it would survive sea state 3 with seven people on board,’ Meeke says.

Meeke suspended overwater flights at once, and then contacted the raft manufacturer. ‘I raised all hell, and it demonstrated to the line staff that the CEO was serious about safety and they could phone me at any time, which several did.’

‘More and more it became the case that I was enlightened, but the problem had been dealt with.’

Mair’s international experience with CHC and other operators has sensitised him to the subtle differences in national culture affecting safety. ‘As a global organisation we have to recognise that cultures are different and we’ve got to manage that. ‘Businesses need to promote a culture which is about open reporting and calling things out,’ he says.

‘But Australians can be more reluctant to embrace that concept because of the notion of dobbing on your mate.’

He also has no illusions about the priorities of front-line staff. ‘If I turn up on a base expecting everyone to drop what they’re doing just because I’m there I am being delusional. If the best time to visit is a Sunday then I go on a Sunday.’

Like many in the global offshore helicopter industry, Mair is a Scot. He uses a distinctively Scottish phrase to describe his method of stakeholder engagement.

‘If you ask what I call the “daft laddie” question of the guy crawling around the helicopter—“what are you doing? What’s that thing? Why’s that bit got corrosion?”—very quickly you get into a conversation where the guy is comfortable in one-to-one engagement,’ Mair says.

‘If he’s in a safe position, not being seen as calling his boss out—then he’s going to trust me to manage the information he’s providing.’

‘I’ve got to work hard to earn and keep that trust.’

The new normal

The sample of engineers and managers was consistent in their belief that boom times would not be returning to mining and offshore aviation in the short or medium term. ‘I think the market is close to the bottom, but not quite there yet,’ Mair says, while Bristow’s Seabrook says it appears be a medium-term slump.

‘We’re very aware when we’re having a downturn that there is a potential morale concern,’ Seabrook says. ‘Our chief executive, Jonathan Baliff, has not wavered that safety is paramount. And that is the message that we are continuing to push out to the bases.’

Mair says customers are no longer prepared to pay premium rates. ‘The need is for same standard, lower cost.’

That standard, he insists is sacrosanct. ‘In rotary wing, if you push the boundaries of safe operations, you risk the confidence of your passenger and your business. It’s game over.’

Bryant says the pause in growth has been a welcome opportunity to take stock and focus on what an aviation business is actually selling.

‘Imagine any airline dropping its guard and an accident happening—that’s your business finished. Safety isn’t a cost; it’s actually what you’re selling to your customers.’

FIFO Fokker: A well-travelled aircraft calls the outback home

The Fokker 100 is Australian aviation’s version of a migrant success story. As successful migrants often do, it has become part of the fabric of its adopted country. Australia now has the largest concentration of Fokker 100s, with the mining boom years having seen examples of the 100 seat regional jet (and its smaller long-range variant, the Fokker 70) rounded up from Europe, the US, Mexico and Asia.

Since 2013, some West Australian miners have been flying unknowingly on the Ford Motor Company’s former executive jet (now VH-JFE), a Fokker 70 that also flew on airline service in Panama. Fokkers now flying mining charters are veterans of airline operations in Brazil, Burma, Turkey and Nepal.

The twin engine T-tail Fokker 100 first flew in 1986, and 283 were built before production ended in July 1997, after the bankruptcy of its maker, Fokker. Despite its age, the F-100 has some appealing features for FIFO operators. Its rear-mounted engines are inherently resistant to runway foreign object damage (FOD) and the aircraft was designed to have good short- and rough-field performance. Take-off and approach speeds are low, with a 120 kt Vref speed possible at maximum landing weight. The aircraft can operate from a 1350 metre runway, making it well suited to the hot and high combination of many FIFO strips in northern WA.

Rolls-Royce says the Fokker 100’s Tay 620/650 turbofans had the most reliable introduction to service of any of its engines. They remain supported by Rolls-Royce Deutschland and are used in several other widely used types, including the Gulfstream G-IV. The F-100 and F-70 are supported by Fokker Services in the Netherlands.

‘You can buy them cheaply because everyone else has finished with them,’ says Meeke. He quotes a figure of $A4.5 million early in the boom for a Fokker 100 with plenty of time before its next C-check, although noting that Alliance Airlines bought 15 F-100s and six F-70s, in various states of airworthiness for $A15 million. ‘It’s a helluva lot of aeroplane for the money.’ Meeke likens FIFO aviation’s use of the Fokker 100 to ‘backpackers buying an old Ford Falcon—sure it’s a bit fuel-thirsty but it’s tough, proven, hasn’t cost you much and is well supported.’

As of September 2016, 47 of the 171 Fokker 100s still in service were operating in Australia, primarily on mining charter. Alliance Airlines operates 16, and eight F-70s, making it the world’s largest operator of the type; VARA has 15; the Qantas-affiliated Network has 14; and Skippers Aviation has two. The other hotspot for Fokker 100s is Iran, where they are flown by Iran Air and Aseman Airlines.

The Fokker 70 carved its own niche in the mining boom, specialising in long commutes. Alliance used one to fly workers from Melbourne to the Telfer mine site in the Pilbara, a 1511 nm (2800km) trip.

Bryant says the F-100’s on time performance can be incredibly good, despite its age. ‘I can’t remember the last time it was less than 95 per cent and some months it’s 100 per cent on time.’

‘There’s an enormous amount of support for the type. It’s got at least another 10 years,’ he says.

Helping the Fokker’s reliability is a relaxed duty cycle compared to that of regular public transport. FIFO Fokkers typically fly four hours a day, logging in a working week about as many hours as some highly utilised airliners add in a day.

However, ageing aircraft issues can affect even the best-operated, maintained and supported aircraft. In March 2014, a Fokker 100 operated by VARA experienced an uncommanded descent and a stuck thrust lever on a flight from Perth to Argyle, WA. The Australian Transport Safety Bureau investigation found that two servos, for the elevator and thrust lever quadrant, had failed on the same sector. The incident prompted Fokker to issue a service bulletin regarding a new servomotor and servomount for the elevator. VARA shortened the replacement life of the servos, from 9600 cycles to 8000 hours.