Governments must do more for airlines as REX pleads for help

2
March 23, 2020
REX
Photo: Rex

The time has come for the Australian federal and state governments to move swiftly to secure its airlines and thus the lifeline around the country and to the regions.

Regional Express which provides the country’s vital links to the regions waved the white flag and said it would shut down around Australia from April 6 if governments did underwrite its losses.

However, Rex will continue in Queensland where all services are underwritten.

The airline is Australia’s largest independent regional operator with 60 Saab 340 aircraft and some 1,500 weekly flights to 60 destinations around the country.

Putting the airline’s plight into perspective the airline’s deputy chairman, the Hon. John Sharp AM said that the recent A$715 million stimulus package was of little benefit to Rex which would gain only an A$1 million a month while it projects losing A$10 million a month running a heavily reduced schedule it announced last week.

“The US Government has put in place a rescue package of USD$50 billion for a total airline revenue in the USA of USD$240 billion – about 20 per cent of one year’s worth of revenue,” said Mr Sharp.

“Australia’s total airline revenue is A$23 billion indicating that an equivalent effort in Australia would require a rescue package in the order of A$4.6 billion instead of the A$715 million proposed.”

Separately there also appears to be friction between Qantas and Virgin Australia over government assistance.

Responding to a suggestion on Sky News about government support for Virgin Australia, Qantas chief Alan Joyce said “the government can’t pick winners and losers, the government has to be fair to every company. Whatever aid it’s giving to one company it must give to everyone in the sector.”

He added that the nation shouldn’t choose to look after “badly managed companies” in an apparent dig at Virgin Australia.

Yet, is wasn’t so long ago in the 1990s that Qantas was considered badly managed with bad aircraft and product decisions.

Today Qantas and Virgin Australia are well managed and both deserve government support.

Arguments that these airlines are either totally or partially foreign owned are irrelevant. They all employ Australians and are critical to our infrastructure.