Compass Airlines operated in Australia for two brief periods in the early 1990s. The two incarnations of the airline were quite separate with different management and aircraft.
History
Compass I was Australia's first
low cost airline
A low-cost carrier or low-cost airline (occasionally referred to as '' no-frills'', ''budget'' or '' discount carrier'' or ''airline'', and abbreviated as ''LCC'') is an airline that is operated with an especially high emphasis on minimizing op ...
. It was established following deregulation of the Australian airline industry in 1990. Previously
Ansett and the government-owned
Australian Airlines
Australian Airlines was a full-service airline based in Australia, servicing Australian and Asian destinations between 2002 and 2006. It was an all-economy, full-service international leisure carrier, and was a wholly owned subsidiary of Qan ...
had operated under the
Two Airlines Policy, which was in fact a legal barrier to new entrants to the Australian aviation market. It restricted intercapital services to the two major domestic carriers. This anti-competitive arrangement ensured that they carried approximately the same number of passengers, charged the same fares and had similar fleet sizes and equipment.
Compass Mark I
Compass Airlines, later referred to as ''Compass Mark I'' was established by Bryan Grey, who had previously run regional airline
East-West Airlines.
East-West had earlier attempted to break the duopoly of Ansett and Australian Airlines by offering cheap fares but in the regulated environment of the time was not allowed to operate directly between major cities so was forced to detour via regional centres. East-West was ultimately acquired by Ansett.
Compass commenced operating between
Brisbane
Brisbane ( ) is the capital and most populous city of the states and territories of Australia, Australian state of Queensland, and the list of cities in Australia by population, third-most populous city in Australia and Oceania, with a populati ...
,
Sydney
Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mountain ...
,
Melbourne
Melbourne ( ; Boonwurrung/Woiwurrung: ''Narrm'' or ''Naarm'') is the capital and most populous city of the Australian state of Victoria, and the second-most populous city in both Australia and Oceania. Its name generally refers to a met ...
and
Perth
Perth is the capital and largest city of the Australian state of Western Australia. It is the fourth most populous city in Australia and Oceania, with a population of 2.1 million (80% of the state) living in Greater Perth in 2020. Perth is ...
on 1 December 1990. In July 1991 it commenced serving
Adelaide
Adelaide ( ) is the capital city of South Australia, the state's largest city and the fifth-most populous city in Australia. "Adelaide" may refer to either Greater Adelaide (including the Adelaide Hills) or the Adelaide city centre. The dem ...
.
At its peak Compass Mark I operated four leased
Airbus A300
The Airbus A300 is a wide-body airliner developed and manufactured by Airbus.
In September 1967, aircraft manufacturers in the United Kingdom, France, and West Germany signed a memorandum of understanding to develop a large airliner.
West ...
(VH-YMA, VH-YMB, VH-YMJ, VH-YMK) and a single
A310 aircraft (VH-YMI). Three further
Airbus A300
The Airbus A300 is a wide-body airliner developed and manufactured by Airbus.
In September 1967, aircraft manufacturers in the United Kingdom, France, and West Germany signed a memorandum of understanding to develop a large airliner.
West ...
aircraft on order in 1990 (VH-YMC, VH-YMD, VH-YME) were not taken up as a result of the failure of finance negotiations. Alternatively VH-YMJ and VH-YMK aircraft were leased from British charter carrier
Monarch Airlines
Monarch Airlines, also known as Monarch, was a British Air charter, charter and scheduled airline founded by Bill Hodgson and Don Peacock and financed by the Switzerland, Swiss Sergio Mantegazza family. The company later became a low-cost air ...
.
Compass Mark I collapsed on 20 December 1991, with the reasons being portrayed as undercapitalisation, sustained fare discounting by its competitors and failing to make use of its potential to also carry freight.
The Federal Government made it extremely difficult for the new airline to succeed, as evidenced by the lack of suitable facilities provided to Compass.
In the major cities, the fledgling carrier was forced to accept what were the least accessible aircraft parking bays inside the terminal of one of their competitors, an impediment to successful trade also noted by the government's own
Australian Competition & Consumer Commission
The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Trad ...
study. Compass Airlines' initial operations were also significantly disrupted by what appeared to be a computer attack on their reservations system.
As the official findings of the
Australian Taxation Office
The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system, superannuatio ...
detail, the federal government set in place legal proceedings that inevitably led to the repossession of the leased aircraft and the effective grounding of the airline, with the subsequent direct and indirect loss of thousands of jobs.
The government and Compass had been in dispute for many months over the amount paid for the provision of services provided by the governmental authority the
Civil Aviation Safety Authority
The Civil Aviation Safety Authority (CASA) is the Australian national authority for the regulation of civil aviation. Although distinct from the government, it reports to the Federal Minister for Infrastructure and Transport.
CASA is responsibl ...
. Although this dispute had been ongoing, the Government chose to act just before the peak 1991 Christmas traveling period. At 21:00 on 20 December 1991, Compass Airlines was grounded. The underlying issues remained unresolved until a final
High Court of Australia
The High Court of Australia is Australia's apex court. It exercises Original jurisdiction, original and appellate jurisdiction on matters specified within Constitution of Australia, Australia's Constitution.
The High Court was established fol ...
hearing in 1999. It was argued, had the airline been allowed to continue trading over the Christmas period, the peak travel season in Australia, it would have had more of a chance meeting its disputed financial obligations than being shut down at this point in time.
[
]
Compass Mark II
Compass Mark II was originally conceived as Southern Cross Airlines but chose to trade under the Compass brand, which seemed to have popular support. This may have been a commercial error as many suppliers required Compass Mark II to purchase items and pay up front, rather than lease the same items as would normally be the case.
It commenced operations on 31 August 1992 with three McDonnell Douglas MD82 and two McDonnell Douglas MD83 aircraft. It collapsed on 4 March 1993. Two further MD83 aircraft on order were not delivered following the final demise Compass Mark II. Southern Cross chairman Douglas Reid was convicted in 1997 of theft and false accounting amounting to $10 million in relation to the collapse. He received a record 10-year jail sentence.Airline scam: Reid jailed for a decade
''Australian Financial Review
''The Australian Financial Review'' (abbreviated to the ''AFR'') is an Australian business-focused, compact daily newspaper covering the current business and economic affairs of Australia and the world. The newspaper is based in Sydney, New Sou ...
'' 3 December 1997
Fleet
Compass Mark I
*4
Airbus A300B4-605R
*1
Airbus A310-304
The Airbus A310 is a wide-body aircraft, designed and manufactured by Airbus Industrie, then a consortium of European aerospace manufacturers.
Airbus had identified a demand for an aircraft smaller than the A300, the first twin-jet wide-bo ...
Compass Mark II
*3
McDonnell Douglas MD-82
The McDonnell Douglas MD-80 is a series of five-abreast single-aisle airliners developed by McDonnell Douglas. It was produced by the developer company until August 1997 and then by Boeing Commercial Airplanes. The MD-80 was the second gene ...
*2
McDonnell Douglas MD-83
The McDonnell Douglas MD-80 is a series of five-abreast single-aisle airliners developed by McDonnell Douglas. It was produced by the developer company until August 1997 and then by Boeing Commercial Airplanes. The MD-80 was the second gene ...
See also
*
List of defunct airlines of Australia
This is a list of defunct airlines of Australia.
See also
* List of airlines of Australia
* List of airports in Australia
References
Further reading
*
{{List of defunct airlines
*
#Australia
Airlines
An airline is a company ...
References
{{Airlines of Australia, state=collapsed
Airlines established in 1990
Airlines disestablished in 1991
Airlines established in 1992
Airlines disestablished in 1993
Companies formerly listed on the Australian Securities Exchange
Defunct airlines of Australia
1990 establishments in Australia
1991 disestablishments in Australia
1992 establishments in Australia
1993 disestablishments in Australia