Australian regional airline collapses

Flight West is the latest financial casualty in Australia's airline industry

By Geoff Hiscock
Asia business editor

SYDNEY, Australia (CNN) -- Australia's turbulent airline industry took another surprising turn Tuesday with the collapse of regional carrier Flight West.

The Brisbane-based airline, which operated a fleet of 16 aircraft, went into voluntary liquidation early Tuesday morning.

The liquidator, Ian Hall of PricewaterhouseCoopers, said the directors had decided they did not want to incur any further liabilities.

The carrier, which was set up in 1987, reportedly has been on the market for some time.

Its fleet of small jet and turbo-prop aircraft flew services to 34 destinations in Queensland, the Northern Territory and northern New South Wales. It also operated a jet service from Brisbane and Sydney to Norfolk Island, off the east coast of Australia.

Expansion program to the Northern Territory

It has about 450 staff and began an expansion program last year that included jet services between Cairns, Darwin and Alice Springs.

Flight West has a code-share arrangement with the No.2 Australian domestic carrier Ansett, which in turn is owned by Air New Zealand.

Australia's biggest carrier, Qantas Airways, said Tuesday it would carry stranded Flight West passengers on its own QantasLink services to the 13 ports served by both airlines.

Australia's aviation industry has undergone massive changes in the past year, with the advent of trunk route competition for Qantas and Ansett from discount airlines Impulse and Virgin Blue.

Impulse snapped up by Qantas

Impulse was snapped up by Qantas last month after its operations became unsustainable. Virgin Blue said this week it was operating profitably, but this did not include start-up costs.

Ansett, the chief rival to Qantas, was hard hit by the grounding in April of much of its Boeing 767 fleet over safety concerns, and is struggling to regain lost market share.

It is also at the center of a complex battle for control of a bigger slice of the Asia-Pacific market involving Qantas, Air New Zealand and Singapore Airlines.