Australian regional carrier Rex has called for significantly increased financial help as it moves to shut down all scheduled air services except government-supported routes in Queensland.
The carrier says it will be forced to make the dramatic move from April 6 unless federal and state governments are prepared to underwrite losses of about $A10m a month.
It says an Australian industry rescue package should be in the order of $A4.6 billion to be proportionate to a proposed $US50 billion US airline relief package.
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It comes as the Australian government has called for people to abandon all but essential domestic air travel and governments in Western Australia, Tasmania, South Australia and the Northern territory have imposed restrictions on inbound travelers.
Rex services to remain unaffected include Ambulance Victoria fixed-wing air ambulance services, charter contracts with mining companies, freight services and pilot training at its pilot academies in Victoria and New South Wales.
Travel demand has already plummeted and Rex expects it to be down by 80 percent as the result of new restrictions imposed by governments. In normal times, the airline operated 60 Saab aircraft to 60 destinations.
The Australian government recently unveiled a $715m rescue package for airlines but the regional carrier says the $A1 million a month direct benefit it receives from the package is far outweighed by the $A10 million a month it would cost to run a recently-announced reduced schedule.
“Rex is supportive of the strong measures taken by the federal and state governments such as the shutting of state borders and imposing a lockdown within the states as well as discouraging all non-essential travel,” Rex deputy chairman John Sharp said.
“These measures will definitely reduce the number of infections from COVID-19,
prevent the health care system from being overwhelmed and save many lives.
“However, tragically for the airline industry, this means that we can expect the year-on-year
reduction of passenger numbers to nosedive to around 80 percent from the 60 percent we are experiencing today.
“There is a tipping point in the airline business beyond which it will no longer be sustainable to operate reduced services.”
Sharp said the airline may be able to reconsider its plans if an assistance package “of sufficient magnitude and availability can be negotiated by the end of the week.”
“Regional air services provide an invaluable and priceless contribution to the socio-economic well-being of local communities throughout regional and remote Australia,” he said.
“State and local Governments should be leading the charge in extreme times like these to assist regional carriers rather than leaving it to the federal government.”
