PUBLISHED 16 AUGUST 2019
Conflicting reports have emerged in the past week about the future of Airnorth, the intentions of its embattled owner, and the on again off again statements of possible buyer Regional Express.
As previously noted in Oz Traveller, the ultimate owners of Airnorth, Bristow Group, have entered into bankruptcy proceedings in the United States.
It has also been noted that a possible buyer for Airnorth is Wagga based Regional Express. The regional airline, which has a substantial presence in much of Australia but not in the Northern Territory where Airnorth is based, has run hot and cold on its intentions regarding Airnorth.
Earlier this year, Regional Express allegedly approached the Darwin based airline regarding a possible takeover. Those talks led nowhere and by autumn 2019, Regional Express had seemingly retreated. But by May/June 2019, it was back on the scene and Regional Express board members were flying up to Darwin to met with “stakeholders” concerned about the future of Airnorth.
Flight Global reports that at a May 23, 2019 board meeting, Regional Express resolved to look at Northern Territory operations. Styling itself as a corporate white knight, Regional Express was looking at getting some Territory dust on its aircraft tyres “to ensure the long term viability of regional air services in the Northern Territory”.
But it appears Regional Express has once again gone cool on Airnorth. The Australian Broadcasting Commission reported this week that Regional Express isn’t interested. The broadcaster quotes John Sharp, Deputy Chairman of Regional Express saying;
“We’ve been approached by third parties … who would make a business of trying to link up sellers with buyers, and we’ve been approached by them with a view of trying to get us to make an offer on Airnorth.
In the end we’ve chosen not to do so.”
Meanwhile, Airnorth’s owner, Bristow Group, put out a media release to respond to media speculation. “We don’t comment on industry rumours or speculation” the statement said as it went on to do exactly that.
Bristow Group claims they are reviewing all options to help it come out of bankruptcy proceedings and that it “is constantly re-evaluating its portfolio.”
Bristow pointedly neither confirms Airnorth is up for sale nor denies it. The business sold its other airline, Eastern Airways, three months ago.
This is interesting as the normally reliable Financial Review also reported last week that Bristow had engaged local advisor Allier Capital to spruik Airnorth to potential buyers. According to the newspaper, first round bids were due in last week. Regional Express got a star mention as a likely buyer, as did Cobham. Cobham has hooked up with the Australian outpost of Merrill Lynch to guide it through the auction process.
You’d have to throw Alliance into the mix and Qantas. Virgin Australia too except they haven’t got a lot of spare coins in the petty cash tin these days – so you might rule VA out of the mix.
So what to make of this? Despite Bristow playing coy, the lines in the sand suggest Airnorth is up for sale and the process is underway. Who is going to buy it? Well, that’s the million dollar question.
Given Regional Express’s vacillating, the odds on them doing so are lengthening. It may be a blessing in disguise for Regional Express. Their core competency is sending SAAB turbo props around South East Australia. Running Fokker jets in the Northern Territory might have been a leap too far.