Compass Mk I & Mk II???

Discussion in 'General Airline Discussion' started by Mrmaxwell, Feb 17, 2008.

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  1. Mrmaxwell

    Mrmaxwell Established Member

    May 18, 2007
    1,009
    251
    SYD
    I have a soft spot for Compass Airlines as it was my first time in a plane (Mk I). It was SYD-MEL-SYD and I remember Mum getting a very cheap fare (for then) which I think was the whole point of Compass - cheap airfares. I will never forget the amazing roast lamb dinner I had on my return flight...best in flight meal I've had (yes I've sampled J/F!)

    What were the details on why both Mk I & II failed? On Wikipedia there are mentions the govt assisted indirectly in the Compass demise by grounding the fleet just before Xmas time...? How did the whole Mk I/Mk II structure go down?
     

  2. toowongman

    toowongman Member

    Aug 2, 2006
    450
    213
    MEL BNE HKG
    Holy Dooly... Compass. Poor old Bryan Grey, he tried so hard. I still remember the TV ad with him walking down the aisle of the A300 showing off the 'Australian first' (?) pop-down TV screens. The full details of the demise of Compass are in a report published by the Trades Practices Commission (now ACCC) in February 1992. Sixty-seven pages. I can't find a copy of this in the ACCC publications list. Queensland University of Technology library has (and most other universities should have) a copy at shelf location 387.710994_14.
     
  3. Yada Yada

    Yada Yada Established Member

    Dec 6, 2004
    1,872
    7
    1F
    Yes, I had a soft spot for Compass too. :-|

    Both Qantas and Ansett rected very quickly and very aggressively to the arrival of Compass. It was the first time they'd faced any competition following deregulation so the price cutting was savage. In my view they were extraordinarily predatory and stepped over the line.

    And they played hard ball in other ways - I recall quite a few occasions sitting on YM's A300's on the apron at MEL for up to 30 mins waiting for the gate to clear at the AN terminal. I felt sure AN were deliberately making it very difficult for YM to access the terminal, resulting in their schedule being disrupted.

    The federal government was complicit for not ensuring that YM could compete on a level playing field. In the end, Compass did not have the money to hold out against the two incumbents. I haven't forgotten that disgraceful episode in Australian aviation history.

    I guess that is one of the reasons I welcomed the arrival of Virgin Blue.
     
  4. dajop

    dajop Senior Member

    Jul 1, 2002
    8,605
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    Yes me too. I flew with them on their first day of flying (not deliberately - just the way it worked out), and they sent all pax a personalised certificate with a picture of the Compass A300 on it, to commemorate their first day in the air. Still have it somewhere at home.
     
  5. Bundy Bear

    Bundy Bear Established Member

    Jul 17, 2004
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    I spent about 4 hours scanning and copying that article. My QUT studies came into use at least once. ;)

    Introduction.
    In December 1991, after only 12 months of operation, Compass Airlines (Compass), the only new operator to enter the domestic aviation market following its deregulation in November 1990, was placed in provisional liquidation. Compass commenced operations on 1 December 1990, initially with two leased aircraft, ultimately increasing to five. Its strategy was to offer a single class service. Compass had facilities in Adelaide, Brisbane, Cairns, Melbourne, Perth and Sydney airports and provided services between these locations. By September 1991, Compass had captured 10 per cent of the total domestic aviation market and 21.3 per cent of the markets in which it operated. The entry of Compass provided a stimulus to domestic tourism. On 20 December 1991 Compass' operations were terminated and the company was placed in the hands of a provisional liquidator.

    8.1 Causes and consequences of the failure of Compass Shortcomings in the entry strategy and management of Compass appear to have been the most important contributing factor to the failure of the airline. Importantly, Compass' entry strategy misjudged the operation, economic and regulatory obstacles to large-scale entry to the domestic market in 1990. It also misjudged the competitive advantages of the established airlines, their likely responses to the additional capacity introduced by its entry and the capitalisation required for successful entry in these market conditions. Other factors which contributed to the airline's failure were the impact of the recession, -which worsened the market environment Compass was entering, the presence of excess capacity in the market, the competitive responses of Ansett and Australian and the problems experienced by Compass in gaining access to appropriate terminal facilities. Compass sought to compete on the basis of filling large one class aircraft with discount fares below standard economy fares of the established operators. However, it did not seem to anticipate that Ansett and Australian would match its discount fares, even though its entry added significantly to the number of seats available on the major trunk routes. When Ansett and Australian matched its discounts for selected seats, Compass was forced to offer progressively deeper discounts to maintain its cash flow and its load factors. As a result Compass' revenue yield fell steadily and it was unable to cover its overheads as they fell due. This strategy in the prevailing market conditions ultimately led to the failure of Compass.

    Want the full article PM
     
  6. Mrmaxwell

    Mrmaxwell Established Member

    May 18, 2007
    1,009
    251
    SYD
    Funny that DJ experienced the same resistance when entering the market with no help from the main terminals and having to fight tooth and nail for access.

    Then fate played its card and Ansett crumbled...leaving established terminals around the major cities empty ready for DJ to take over...and the rest is history.

    Success is 8 parts preparation and 2 parts luck.
     
  7. bambbbam2

    bambbbam2 Active Member

    Feb 13, 2005
    857
    1
    Perth, WA
    I can remember in '91 getting a per-syd fare on Compass for $99. It also helped competition, I also got a fare syd-per on Australian Airlines for $99..
     
  8. Warks

    Warks Established Member

    Oct 9, 2003
    2,166
    816
    Sydney
    I was one of the poor sods marooned by the first Compass collapse. I was living in country NSW (north west) and was gfoing to spend Xmas in BNE with the folks. But just before Xmas I had a wedding in SYD (where I was best man) so I thought I'd fly down and back for the wedding. I drove into Brisbane armed with my Compass ticket to discover as I arrived that Compass had gone belly up! I should have been driving towards Sydney that afternoon rather than Brisbane!

    Went out to BNE ariport and joined an enormous queue at the AA or Ansett counter (can't remember which) - thoughtfully they had only one desk open for Economy. There was a second desk with about 3 people in line for Business. A bloke left the Business line and walked up to me (about 78th in line) and told me that I could buy a ticket at the Business window. Don't know why he told only me. I told the person next to me in the queue but they weren't game to leave the line. I went up to the desk and had my new ticket in about 10 minutes. The most amazing thing about that was the new ticket actually cost less than the Compass ticket that I'd blown. I'm sure today they would have jacked their prices up to $500 returns in the same situation!

    Anyway it all went smoothly from there - I got to the wedding and back for Xmas.

    I hung onto my ticket for years in case I could get credit for it! Waited through the brief existence of Compass II without luck...
    Think I chucked it out in the last move.
     
  9. markis10

    markis10 Veteran Member

    Nov 25, 2004
    30,088
    5,547
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    What the report does not say is that Compass Mk1 also flew a large time with its belly at 20% of capacity for freight, simply because they did not have a freight division!
     
  10. straitman

    Moderator

    Apr 27, 2003
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    .... and freight is where a lot of the profit comes from.
     
  11. Para003

    Para003 Newbie

    Feb 29, 2008
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    Dear old Compass, :( I even bought shares in the first float. My Wife went to Perth and return. Compass 2 sent me some bag ID tags....... kept them, but won't put them on luggage as don't want the attention!!!!!!!!!!!!!!!!
     
  12. straitman

    Moderator

    Apr 27, 2003
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    Para003,

    Welcome to AFF.

    Compass tags would certainly only bring good attention though would it not :?:
     
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