Airlines of Tasmania Pty Ltd, doing business as Par-Avion Airlines, takes tourists into some of the most remote and inaccessible places on the planet. They've been doing it for decades, carving out a small but sustainable niche for themselves in the aviation industry. But like any operator, they are not immune to contemporary commercial aviation business challenges, including replacing aging aircraft, dealing with rising costs, managing seasonality issues, and negotiating government indecision.

Speaking exclusively with ch-aviation in Hobart, Par Avion Managing Director Shannon Wells says the carrier is looking to source at least two replacement aircraft at a price a family-run business can manage. It is also selling Hobart Cambridge Airport, Hobart's original airfield, which the family has owned for decades.

A family business

Wells took over Par Avion from his father, Don Wells, who worked as a mechanic in the Royal Australian Air Force as a young man before starting Airlines of Tasmania (1990) in the 1960s with the help of some business partners. Airlines of Tasmania operated what were then regulated passenger routes around the island. Don Wells eventually split from Airlines of Tasmania and struck out on his own, using a Commander to do aerial survey and photography work, while Airlines of Tasmania retained the regulated passenger flights.

At the same time, Par Avion was operating a tourist charter business in parallel with Airlines of Tasmania. However, in the early 1990s, both airlines went into liquidation. Don Wells bought Par Avion, primarily to acquire hangars and other infrastructure at Cambridge airport but also to add Par Avion's tourism charter business to his family's aerial utility work business. He also picked up the Airlines of Tasmania trading name - although at the time of that airline's liquidation he had no involvement in its operations or equity in the business. Now holding both assets, the decision was made to trade under the Par Avion brand, partly because it was already established, partly because it clearly differentiated the business from another Tasmania-based operator, the now defunct Tasair, and partly because the family just liked the name.

Shortly after buying the airlines, the Australian government began privatising airports, and Don Wells negotiated to buy Cambridge. Since then, it has developed the airport and the land around it.

"We've gone from there," said Shannon Wells, who has been Par Avion's MD since 2009. "Don is still going strong and still involved in the business's strategy."

Fleet replacement the big challenge

In 2024, Par Avion is the only significant Australian operator with its primary base in Tasmania. "We pretty well do everything that isn't turbine," Wells said. Its primary businesses are passenger charter operations to Maria Island and Bathurst Harbour (Melaleuca), and a flight training school at Cambridge. The family also continues to generate revenue from operating Cambridge airport. "If you have to fly to Strahan or want a charter flight to Wynyard, you call us," says Wells. "Apart from one regular passenger route between Launceston and Cape Barren Island, we're charter and on-demand."

The current fleet comprises 13 aircraft, including a BN-2 registered as VH-ZOU (msn 2168); six Cessna (single piston) 172 Skyhawk SPs variously registered as VH-EOK (msn 172S10018), VH-EOX (msn 172S10033), VH-PRJ (msn 172S10642), VH-TSP (msn 172S9017), VH-TSR (msn 172S9782), and VH-USQ (msn 172S10301); one leased Cessna 206H registered as VH-IDF (20608017): two Cessna U206G Stationairs registered as VH-MRK (msn U20606086) and VH-MYS (msn U20605162); one Cessna (twin piston) 404 Titan registered as VH-WZM (msn 404-0837); one Pacific Aerospace CT/4B Airtrainer registered as VH-YCX (msn 078); one Piper (twin piston) Navajo C registered VH-BTI (msn 31-8212003); and one leased Piper PA-44-180 Seminole registered as VH-NLO (msn 44-7995003). In addition to the active aircraft, the company retains several retired aircraft, which it uses for parts. They also recently sold four Beech (twin piston) Model 76 Duchesses to Fijian general aviation operator Sunflower Aviation (Nadi).

"We need to look at how we can get away from these older aircraft and into more modern aircraft," said Wells, who says aging aircraft and fleet replacement are his biggest challenges. "Cessna Caravans work for our IFR work, but our main yields come from the tourist flights down to Tasmania's southwest, places like Bathurst Harbour where it's a seven day walk to the nearest town. In theory, our planes can do six or seven sectors a day ferrying passengers in and out, and it's high yielding, but the area also gets hurricane-force winds, rain 270 days a year, and there's no instrument approaches down there, so we have to cancel a fair bit."

Par Avion's 11 owned aircraft range in age from 17 to 46 years, with the Cessna 172s the youngest, between 17 and 23 years old. Wells would like to update two of his older aircraft with the Cessna (single turboprop) Caravan 208EX, which he describes as an "ideal aircraft" for regular passenger transport and tourism routes. But there are sticking points. The first is the runway length at the Department of Parks and Wildlife-managed Melaleuca airstrip, which is 450 metres and a bit short for the type. The second is the cost. "You are looking at AUD3-3.5 million (USD2.03-2.37 million) each to buy, and that's a lot of money for a small airline like us," he said. Wells is also eyeing the Tecnam P2012. Again, the cost is an issue. "We'd be looking for two new aircraft, so we're talking AUD6 million (USD4.06 million). It's a lot of money for a general aviation business."

Par Avion's MD says other fleet renewal avenues include talking to OEMs like Britten-Norman and doing fleet refurbishments. Britten Norman's work with hydrogen-powered aircraft interests Wells, but he thinks it will be some time before hydrogen-powered flying becomes a viable commercial reality. "I'm also happy to buy used, but the types are hard to find in Australia and what's available can be a bit old."

Growing subsidised passenger flying

The twice-weekly regular passenger route between Launceston and Cape Barren Island is subsidised by the Australian government's Remote Air Services Subsidy (RASS) scheme. The route, along with others operated by other airlines, recently went up for re-tender. "We've just re-tendered, and we'll see how we go," said Wells, who puts either the Cessna 404 or Piper Navajo on the sector. Wells is non-committal about chasing more subsidised passenger routes, the remainder of which are located outside Tasmania. "Our competitive advantage is Tasmania," he says.

More specifically, Par Avion's competitive advantage is its tourist flights to Tasmania's southwest, a primordial World Heritage area that's extremely hard to access and no other operator flies into. "We do day tours down there," Wells says. "These are waterways and places untouched by Europeans, and I can charge AUD700 dollars (USD474) per person for a two-hour flight in an Islander. We also fly our Cessna 206s down there. On a sunny summer's day, we can take 20 or 30 people per day down there."

Difficulties of RPT ops in Tasmania

Scheduled passenger flights, whether subsidised or purely commercial, are a tricky business in Tasmania. Airlines of Tasmania, and more recently Tasair, failed trying to make it work. Qantas (QF, Sydney Kingsford Smith) and Virgin Australia (VA, Brisbane International) connect Hobart International and Launceston with key cities on the Australian mainland. QantasLink connects Melbourne Tullamarine to Burnie and Devonport, while Rex - Regional Express (ZL, Wagga Wagga) connects Melbourne to King Island and Burnie. Sharp Airlines (SH, Hamilton, VI) maintains a sizeable presence in Launceston and uses its Fairchild FH-227s to link Tasmania's second-biggest city to King Island, Flinders Island, Burnie, and Melbourne. However, there are no scheduled intrastate passenger services out of Hobart, despite the time it takes to drive to towns on the island's west and northwest coast.

"We've tried Hobart-Wynyard twice and had a connection there to meet the Sharp Airlines' King Island service," Wells says. "Professionals liked it, but we didn't get much business from the public service. There are no alternatives to driving [four hours from Hobart], but public servants get a day's travel allowance to drive, overnight accommodation and meals, and another day's travel allowance coming back. We did a survey with the government about that. We got around 1,000 responses, and the allowances were one of the reasons public servants wanted to stick to driving. And Federal Senators don't fly with us anymore because it's a line item on their expense report. I think Hobart-Wynyard and Hobart-Strahan can work, but we need the government business."

However, Par Avion's relatively diversified revenue streams, around one-third from the flying school, one-third from tourist operations, and one-third from airport operations and its MRO business, mean regular passenger transport services are a nice add-on rather than a vital cog in the business strategy.

Plans to sell Cambridge are well-advanced with a buyer in the works. "It's a busy airport, and we make a small profit, but it's time for a change," said Wells about the decision to offload Hobart's original and second-busiest airport. "It's been in the family for 30 years. But we'll keep operating from here, and I don't see what we do disappearing anytime soon."

Regulatory indecision threatens general aviation

Despite his role on the Civil Aviation Safety Authority (CASA) technical working group, Wells remains "frustrated" with the agency's lack of progress on reforms to Parts 145 and 42 of Australia's Civil Aviation Safety Regulations (CASR). The reforms are a work in progress that has been underway for several years and are creating significant uncertainty for general aviation operators. Par Avion is caught in the mess because while primarily a non-scheduled charter Part 135 operator, two of the aircraft are regulated under Part 145 because they operate the scheduled flights to Cape Barren Island and are also subject to Part 42 Continuing Airworthiness Management rules.

"I'm petrified that [changes to] Part 42 could shut down general aviation," he said. "The concern I've got is that CASA is looking at Part 43, where an engineer can sign off an aircraft without being in an organisation for private aircraft and airwork aircraft. If you've got a Cessna 172 and you own it, you can go to any engineer and they can sign off on it."

"If you've got an aircraft of more than ten seats, you've got to go to a CAR 145 licenced MRO, which we are, but there's this area in between where you're not an airwork aircraft and you're not a big aircraft - I don't know if CASA is going to impose Part 42 or not, and it's been stalling and stalling for years now."

"It's getting really frustrating because we just need to know which way to go. I can't have half my fleet doing one thing and half my fleet doing something. It's got to be one or the other. I think they've done the proposed part 145 maintenance rules well because they're quite scalable. But there's some big hand grenades in Part 42, which I'm very vocal about internally."