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Rex U-turn on bailout support, shuts Queensland routes

written by Adam Thorn | March 31, 2020

Rex has U-turned on its support for Saturday’s regional aviation bailout and now says it will shut down Queensland passenger routes in 24 hours.

In a statement, Regional Express said, “While the federal government has announced several assistance packages for airlines, no concrete details have been forthcoming and more importantly, not a single cent has been disbursed.”

However, on Saturday, deputy chairman John Sharp said the business had the “utmost gratitude” for the $300 million financial package, which he added would allow essential regional aviation services to continue. The airline appears to have reverted to last week’s position of being critical of the government.

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In a statement released at midnight, Rex said it would shut down its Queensland regular public transport services from 1 April 2020, including five regulated routes operated under contract with the Queensland government.

The Queensland ports affected are:

  • Bamaga NPA
  • Bedourie
  • Birdsville
  • Boulia
  • Brisbane
  • Burketown
  • Cairns
  • Charleville
  • Cunnamulla
  • Doomadgee
  • Hughenden
  • Julia Creek
  • Karumba
  • Longreach
  • Mount Isa
  • Mornington Island
  • Normanton
  • Quilpie
  • Richmond
  • St George
  • Thargomindah
  • Toowoomba (Wellcamp)
  • Townsville
  • Windorah
  • Winton

In a strongly-worded statement, the carrier said, “The federal government is only funding a minimum essential service of one return weekly flight per route, and this reduced schedule approach was rejected by the Queensland state government.

“With cash fast running out and no immediate prospect of a workable solution from the Queensland state government, Rex has no choice but to declare a force majeure event for the contract and suspend all services on Queensland regulated routes indefinitely until it has the ability to service the contract in a commercially viable manner.”

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It said services on the remainder of its network would run to the “barebones levels” facilitated by Saturday’s regional aviation package.

The announcement appears to complete a huge about-turn in its position. On Saturday, Sharp said, “All regional communities and residents should be extremely grateful to the Coalition government for its commitment to the future of the regional cities.

Regional Express Captain Hayden Godwin and First Officer Molly Morris‑Howes. (Steve Gibbons)
Regional Express Captain Hayden Godwin and First Officer Molly Morris‑Howes in front of VH-ZRH. (Steve Gibbons)

“This meaningful assistance package not only seeks to keep essential air services going, but also tries to prevent the existing regional aviation providers from collapsing.”

Sharp noted that the government assistance package will see “all previously sustainable” regional operators “spring back into business if the crisis dies down” within six to nine months.

The package will include $198 million for regional airline routes to 138 communities and a further $100 million for related companies that support the industry.

Last week, Rex appeared to be aggressively pushing for a bailout. On Monday, 23 March, the business declared it would shut down its passenger air services in all states except Queensland from 6 April, unless there was a financial aid package.

Then, on Friday, it claimed it would not be able to transport coronavirus testing kits from the regions to the capital cities for analysis without government help.

25% off starts now! Australian Aviation magazine Cyber Monday sale is now live. Have the very best of Australian Aviation’s annual print and digital subscription. This includes every In Focus and Behind the Lens digital magazine, special coverage, exclusive photos and editions you may have miss. Subscribe now at australianaviation.com.au.

15 Comments

  • SydDan

    says:

    Reposition VARA atr’s and give VA the help. I do like qfl but it’s also important to encourage healthy competition, we don’t want a monopoly.

  • Red Cee

    says:

    I have no problem with the Government throwing money at REX, as long as it is buying stock, and will own the airline., or if REX has to pay it back. All airlines are struggling, REX is no different. Australian Government ownership is preferable to grants to foreign owners.

    • Geoff

      says:

      Agree. Taxpayer money should remain in Australia not in the hands of foreign “partners”.

    • Trevor

      says:

      Agree with your sentiments but at this stage the details are unknown and why would you want shares in a failing company, I trust this is a loan!

  • Peter

    says:

    Who is running the business at REX? Why so many different announcements, comments, backflips and so much negativity. With 24 hours of the Government announcing the ‘Job Keeper’ package over 120,000 businesses had registered their intent. They worked it out. So why does REX have so much trouble navigating the current situation. There’s been help. Variable Aviation Costs have been reduced by one package, Regional routes subsidised by another, all salary/wages subsidised by the latest. Just start flying and supporting the regional communities before they give up on the airline and you have no loyal customer base to go back to.

  • Bernhard

    says:

    Any funding must ensure changes are made to Australian people and society benefit as trade off. My view is Tiger name or Virgin name goes and possibly merge Virgin and Rex to meet Australian genuine needs.

    • James

      says:

      Merge a company owned by a Singaporean businessman who drains the coffers through dividends and regularly engages in public spats with other airlines, airports and councils, that operates ageing turboprops with no viable replacement, with a company that has already spectacularly failed in the regional airline sector and has been running a loss for almost a decade and has a struggling low cost carrier to care for as well and is owned predominantly by overseas interests with enormous debt and low cash reserves.

      What are you smoking and can you share please?

  • Peter Orange

    says:

    This is one of the problems with the two levels of government with State and Federal pulling in different directions and how states rights inhibit sensible decision making

  • The big difference is that Rex isn’t Australian owned.
    It is owned by Singaporeans who are milking it to the end having made no plans to replace its very aged saab 340 fleet, an aircraft out of production for well over 25 years.
    Give them nothing.
    VA is no better being over 90% Chinese and Arab owned with SQ having off the end.

  • It seems to me that the Queensland state govt holds the key to resolving this impasse.

  • matty

    says:

    no surprise there….

  • Peter

    says:

    To be blunt, piss them off. They ALWAYS have their hand out. Pay another operator to cover these routes. Fly Corporate could look after the western runs and Skytrans could look after the Northern runs

  • Hector

    says:

    Put your hand deep into your own super deep pockets Johnny and Kim, you don’t need the Australian Govt’s $ to keep Rex afloat. Don’t be greedy.

  • Paul R

    says:

    Agree….no taxpayer money unless it’s a loan…and they agree to maintain services…..otherwise this is just Holden all over again……

  • AlanH

    says:

    I don’t mind a federal system of government because the states can look after the nuts & bolts of day-to-day infrastructure needs, but having said that watching this debacle unfold I’m looking enviously at Enzed where decisions are being made by one central government for the good of the whole country, albeit a much smaller one than here. I think the problem with Australia is that there aren’t enough states so the ones we do have are too powerful. If we had 20 states, say, and no self-government of Canberra (what a joke!), things might pan out a little more evenly with foreign-owned bullies like Rex.

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Rex U-turn on bailout support, shuts Queensland routes

written by Adam Thorn | March 31, 2020

Rex has U-turned on its support for Saturday’s regional aviation bailout and now says it will shut down Queensland passenger routes in 24 hours.

In a statement, Regional Express said, “While the federal government has announced several assistance packages for airlines, no concrete details have been forthcoming and more importantly, not a single cent has been disbursed.”

However, on Saturday, deputy chairman John Sharp said the business had the “utmost gratitude” for the $300 million financial package, which he added would allow essential regional aviation services to continue. The airline appears to have reverted to last week’s position of being critical of the government.

Advertisement
Advertisement

In a statement released at midnight, Rex said it would shut down its Queensland regular public transport services from 1 April 2020, including five regulated routes operated under contract with the Queensland government.

The Queensland ports affected are:

  • Bamaga NPA
  • Bedourie
  • Birdsville
  • Boulia
  • Brisbane
  • Burketown
  • Cairns
  • Charleville
  • Cunnamulla
  • Doomadgee
  • Hughenden
  • Julia Creek
  • Karumba
  • Longreach
  • Mount Isa
  • Mornington Island
  • Normanton
  • Quilpie
  • Richmond
  • St George
  • Thargomindah
  • Toowoomba (Wellcamp)
  • Townsville
  • Windorah
  • Winton

In a strongly-worded statement, the carrier said, “The federal government is only funding a minimum essential service of one return weekly flight per route, and this reduced schedule approach was rejected by the Queensland state government.

“With cash fast running out and no immediate prospect of a workable solution from the Queensland state government, Rex has no choice but to declare a force majeure event for the contract and suspend all services on Queensland regulated routes indefinitely until it has the ability to service the contract in a commercially viable manner.”

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It said services on the remainder of its network would run to the “barebones levels” facilitated by Saturday’s regional aviation package.

The announcement appears to complete a huge about-turn in its position. On Saturday, Sharp said, “All regional communities and residents should be extremely grateful to the Coalition government for its commitment to the future of the regional cities.

Regional Express Captain Hayden Godwin and First Officer Molly Morris‑Howes. (Steve Gibbons)
Regional Express Captain Hayden Godwin and First Officer Molly Morris‑Howes in front of VH-ZRH. (Steve Gibbons)

“This meaningful assistance package not only seeks to keep essential air services going, but also tries to prevent the existing regional aviation providers from collapsing.”

Sharp noted that the government assistance package will see “all previously sustainable” regional operators “spring back into business if the crisis dies down” within six to nine months.

The package will include $198 million for regional airline routes to 138 communities and a further $100 million for related companies that support the industry.

Last week, Rex appeared to be aggressively pushing for a bailout. On Monday, 23 March, the business declared it would shut down its passenger air services in all states except Queensland from 6 April, unless there was a financial aid package.

Then, on Friday, it claimed it would not be able to transport coronavirus testing kits from the regions to the capital cities for analysis without government help.

25% off starts now! Australian Aviation magazine Cyber Monday sale is now live. Have the very best of Australian Aviation’s annual print and digital subscription. This includes every In Focus and Behind the Lens digital magazine, special coverage, exclusive photos and editions you may have miss. Subscribe now at australianaviation.com.au.

15 Comments

  • SydDan

    says:

    Reposition VARA atr’s and give VA the help. I do like qfl but it’s also important to encourage healthy competition, we don’t want a monopoly.

  • Red Cee

    says:

    I have no problem with the Government throwing money at REX, as long as it is buying stock, and will own the airline., or if REX has to pay it back. All airlines are struggling, REX is no different. Australian Government ownership is preferable to grants to foreign owners.

    • Geoff

      says:

      Agree. Taxpayer money should remain in Australia not in the hands of foreign “partners”.

    • Trevor

      says:

      Agree with your sentiments but at this stage the details are unknown and why would you want shares in a failing company, I trust this is a loan!

  • Peter

    says:

    Who is running the business at REX? Why so many different announcements, comments, backflips and so much negativity. With 24 hours of the Government announcing the ‘Job Keeper’ package over 120,000 businesses had registered their intent. They worked it out. So why does REX have so much trouble navigating the current situation. There’s been help. Variable Aviation Costs have been reduced by one package, Regional routes subsidised by another, all salary/wages subsidised by the latest. Just start flying and supporting the regional communities before they give up on the airline and you have no loyal customer base to go back to.

  • Bernhard

    says:

    Any funding must ensure changes are made to Australian people and society benefit as trade off. My view is Tiger name or Virgin name goes and possibly merge Virgin and Rex to meet Australian genuine needs.

    • James

      says:

      Merge a company owned by a Singaporean businessman who drains the coffers through dividends and regularly engages in public spats with other airlines, airports and councils, that operates ageing turboprops with no viable replacement, with a company that has already spectacularly failed in the regional airline sector and has been running a loss for almost a decade and has a struggling low cost carrier to care for as well and is owned predominantly by overseas interests with enormous debt and low cash reserves.

      What are you smoking and can you share please?

  • Peter Orange

    says:

    This is one of the problems with the two levels of government with State and Federal pulling in different directions and how states rights inhibit sensible decision making

  • The big difference is that Rex isn’t Australian owned.
    It is owned by Singaporeans who are milking it to the end having made no plans to replace its very aged saab 340 fleet, an aircraft out of production for well over 25 years.
    Give them nothing.
    VA is no better being over 90% Chinese and Arab owned with SQ having off the end.

  • It seems to me that the Queensland state govt holds the key to resolving this impasse.

  • matty

    says:

    no surprise there….

  • Peter

    says:

    To be blunt, piss them off. They ALWAYS have their hand out. Pay another operator to cover these routes. Fly Corporate could look after the western runs and Skytrans could look after the Northern runs

  • Hector

    says:

    Put your hand deep into your own super deep pockets Johnny and Kim, you don’t need the Australian Govt’s $ to keep Rex afloat. Don’t be greedy.

  • Paul R

    says:

    Agree….no taxpayer money unless it’s a loan…and they agree to maintain services…..otherwise this is just Holden all over again……

  • AlanH

    says:

    I don’t mind a federal system of government because the states can look after the nuts & bolts of day-to-day infrastructure needs, but having said that watching this debacle unfold I’m looking enviously at Enzed where decisions are being made by one central government for the good of the whole country, albeit a much smaller one than here. I think the problem with Australia is that there aren’t enough states so the ones we do have are too powerful. If we had 20 states, say, and no self-government of Canberra (what a joke!), things might pan out a little more evenly with foreign-owned bullies like Rex.

Leave a Comment

Your email address will not be published. Required fields are marked *

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