Smaller Australian airlines issue mayday on government aid

March 27, 2020
A REX SAAB 340. Photo: Rex

A call by Australian regional carrier Rex for urgent government assistance has been echoed by other smaller airlines warning they face imminent closure.

The regional and charter carriers have written jointly to the Australian government with a desperate plea for a financial lifeline in the face of air travel restrictions and state lockdowns.

The carriers — Air Link, Aviair, Alliance Airlines, Chartair, Fly Corporate, FlyPelican, Hardy Aviation and Sharp Airlines — warn their financial survival “can be counted in days rather than weeks”.

READ: Virgin Australia downgrade underscores need for government aid.

“The continuing existence of jobs for the many thousands of employees engaged directly or indirectly by our companies (is) now in jeopardy,’’ the letter says.

“Given the urgency of the situation we call upon government to offer our companies a lifeline. We request reconsideration of the design of its current aviation assistance packages to allow them to provide more tangible aid to a vital air transport sector struggling to cope.”

The airlines say they are unlikely to benefit from a previously announced $A715m aviation support package that offers waivers in areas such as fuel excise and air navigation charges because the relief assumes airlines are still flying when this is largely not the case.

It calls for that money to be immediately reallocated to provide more immediate and targeted financial relief.

It also emphasizes that regulatory requirements smaller airlines need to meet before they can re-open differentiates them from other small businesses.

“The Government, while repeatedly proclaiming the importance of protecting regional aviation as a vital resource for growing the economy appears, instead, to have wiped its hand of the industry at what is its most critical time,’’  they say.

“If existing operators are not protected until such time as the COVID-19 crisis resolves, restoration of regional air travel services is highly doubtful given the significant regulatory and system development barriers making entry by new operators exceedingly difficult.”

Meanwhile, Rex has indicated a move by the competition watchdog to allow it to coordinate with bigger airlines on regional routes will only work if it gets other government assistance.

The Australian Competition and Consumer Commission on Thursday granted interim authorization to Regional Express (Rex) allowing it to coordinate flight schedules with Virgin Australia and Qantas on 10 regional routes during the coronavirus pandemic.

The routes include four in NSW, one in Victoria, three in South Australia and two in Queensland.

But Rex said it would only enter discussions with QantasLink if there are meaningful assistance packages from federal, state and local governments that would “keep essential air services going”.

The carrier has previously warned it will suspend all services except government-subsidized routes in Queensland from April 6 unless it gets government help.

“The federal, state and local governments all need to act urgently and decisively to determine specific assistance packages so that the airlines can at least provide the bare minimum of essential air services to keep the communities running,’’ Rex deputy chairman John Sharp said.

“For example, Rex carries critical blood supplies daily to regional and remote communities on its network, as well as transporting COVID-19 testing samples from regional centers to capital cities for analysis. This may no longer be possible in the foreseeable future.”