Australian bush to take another hit with Rex capacity cuts

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March 18, 2020
REX
A REX SAAB 340. Photo: Rex

Drought, bushfires and now isolation: regional communities in Australia are about to take another hit as regional carrier Rex cuts flights by about 40 percent and suspends some routes.

The Rex cuts come after extensive domestic capacity reductions at both Qantas and Virgin Australia and as Australia’s biggest independent regional carrier on Wednesday withdrew its profit guidance due to the level of uncertainty caused by the COVID-19 outbreak.

READ: Virgin Australia suspends international flying, halves domestic capacity.

But the airline commended the Australian government and Deputy Prime Minister Michael McCormack on a $A715m relief package aimed at supporting the airline industry.

The package involves the refunding and ongoing waiving of a range of Government charges — including aviation fuel excise, air navigation charges, and security fees  — on domestic airline operations.

The assistance package was also welcomed by other carriers but criticized as not going far enough by at least one union.

Lobby group Airlines for Australia & New Zealand (A4ANZ) chairman Professor Graeme Samuel hailed  the package as a welcome and important measure from the government.

Rex agreed.

“This is a great start, and we thank the Deputy Prime Minister for hearing Rex’s voice and
understanding that these measures are crucial to give Rex and all regional carriers a fighting
chance to stay afloat long enough,”  Rex chairman Lim Kim Hai said.

“Rex is disappointed that the package does not include a sovereign guarantee of new loans taken up by regional carriers to tide them through the period of extreme negative cash flow until normalcy returns and we are hopeful that this will be adopted in a second stage of assistance.”

The airline said it was not relying on government assistance and it had instituted a broad range of measures to cut costs and conserve cash.

This included reducing the network to match the expected sharp downturn.

“The exact network changes will be announced in the coming days but Rex expects about 40 percent of capacity will be taken out with some routes being cut altogether,” the airline said in a statement.

“Rex has also spoken to all the unions, and we are grateful and comforted that all unions and staff are firmly supportive of the draconian measures that need to be implemented in these dire circumstances.”