In a regional airline the costs that wreck a year are fuel, engines and weather, so I give each one a named owner before it arrives.
I am the chief financial officer of Saltbush Air Group Limited, a fictional regional airline based in Perth and listed on the ASX. In the year to June 2026 we earned A$742 million from three businesses: contract charter flights that carry fly-in fly-out workforces to mine sites for resources companies, scheduled services linking Perth with towns in the Pilbara, the Kimberley, the Mid West and the Goldfields, and a smaller aviation-services arm handling freight, ground services and maintenance for other operators. We fly 44 aircraft, 26 turboprops and 18 jets of about 100 seats, and employ 1,720 people.
My route here passed through most of the rooms where an airline's money is decided. I audited mining contractors and a small charter operator in Perth, ran fleet and fuel finance at a domestic airline in Brisbane, priced aircraft leases for a lessor in Dublin for six years, and then spent seven years in finance at a bus operator that earned its living from state government contracts. Each job showed me the same handful of risks from a different side of the table: the engine, the fuel price, the contract, the payroll and the weather.
I joined Saltbush in March 2021, while Western Australia's border controls were still in place and charter flying was carrying the company. The decisions I would defend most readily made our results less exciting: hedging only the fuel our customers do not already pay for, buying mid-life jets for contracts shorter than any new lease, and settling a pilots' agreement that paid people to stay rather than paying everyone more. Each had a cost, and on these pages I have tried to describe the costs as plainly as the gains.
A fuel hedge sized to the real exposure
We cut the hedge book from about A$240 million of notional value to A$95 million by excluding charter fuel that customers already carry through monthly pass-through clauses. Cash posted as hedge collateral, which reached A$18 million in 2020, has been nil since early 2022.
Six mid-life jets matched to their contracts
We bought six 100-seat jets averaging fourteen years old for A$138 million, engine overhauls included, instead of leasing new aircraft for twelve years to serve five- and seven-year charters. They have returned about 14 per cent before tax, against 9 per cent modelled for the lease.
Pilot departures more than halved
Our 2023 pilots' agreement combined 12 per cent base increases over three years with retention payments from the fourth year of service and a funded cadet pathway. Annualised attrition fell from 19 per cent to 8 per cent, at about A$9 million a year less than a flat increase would have cost.
A stronger balance sheet with more owned aircraft
Net debt excluding lease liabilities fell from A$262 million, 3.1 times underlying EBITDA, in June 2021 to A$214 million, 1.2 times, in June 2026. Over the same period owned aircraft rose from 11 of 39 to 21 of 44.
Current focus
I am preparing the board's fleet plan for 2027 to 2032. It must decide when our turboprops, now averaging nineteen years old, are replaced, whether their successors are owned or leased, and how much weight to give the emissions reporting of our resources customers. Alongside it I am reviewing our insurance programme before the cyclone season, since higher hull deductibles have made weather and minor damage a larger share of our own risk.
Conversations I welcome
I am not looking to leave Saltbush. With my board's consent I would accept one non-executive directorship at an ASX-listed company outside aviation and the resources sector, joining its audit and risk committee and, after a year, chairing it if the board wished. Twenty-five days a year is what I can promise that board, preparation included. I also speak occasionally to finance and governance audiences about fuel, fleet and contract risk.