Strategic Airlines Drops Regional Routes

Australian carrier Strategic Airlines will suspend services between Perth and Denpasar, Bali and will end all flights from the Northern Queensland city of Townsville by the end of October, as part of its ongoing restructuring. The company is set for a complete rebrand as it repositions itself in the local market ahead of the launch of long-haul scheduled flights to Hawaii and China.

Strategic Airlines has confirmed that despite strong growth on the Perth – Bali route, where passenger numbers have increased by more than a quarter, increased competition has made it difficult for the airline to compete effectively. “We have conducted a network-wide review of our operations and as a result of this review and the current Perth-Bali competitive environment, we have made a decision to withdraw from operating our Perth-Bali-Perth service for the foreseeable future,” it confirmed in a statement.

The carrier has served the route for the past 18 months and will operate its last flight on October 29. As the table below shows, it secured just a five per cent share of the estimated 643,000 O&D passengers that travelled on the route in the past year with strong competition from the likes of Garuda Indonesia, Virgin Australia and low-cost carriers Indonesia AirAsia and JetStar Airways. However, Strategic Airlines does hold the strongest yield with average one-way fares almost 25 per cent greater than its closest rival and almost double the market average.

Strategic Airlines is also to end all flights to Townsville in north Queensland - the carrier will close its link to Brisbane next month and its international link to Bali from October 1. It had faced strong competition on the domestic route to Brisbane with Qantas and Virgin Australia offering multiple daily departures and JetStar Airways a daily rotation. However, it was the sole operator to Denpasar, carrying around 9,000 O&D passengers in the past year.