Rex has said it may not be able to transport COVID-19 testing samples from regional areas to capital cities for analysis unless it receives a government bailout.
Australia’s largest independent airline said it would announce the “shutting down of its network” on Friday if it hadn’t received “concrete proposals” of financial aid.
The statement further raises the stakes in regional airlines’ battle to secure help. On Thursday, eight independent carriers warned they could go out of business in “days rather than weeks” unless the government underwrites Australia’s small airline operators.
Rex deputy chairman John Sharp said, “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.
“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 centres to capital cities for analysis. This may no longer be possible in the foreseeable future.”
Meanwhile, earlier in the week, Rex declared it would shut down its “expansive regular public transport” air services in all states except Queensland from 6 April, unless there is a financial aid package.
Sharp said then that the current package of help for the aviation industry was not enough.
He said, “The federal government has acted swiftly by promising a rescue package to the airlines of $715 million.
“However, the direct benefit to Rex from this package is only $1 million a month, which is grossly insufficient to cover the $10 million a month we expect to lose running the heavily reduced schedule we announced last week.”
Rex said it is seeking a rescue package similar to what has been promised in the US, which, the business said, would amount to 20 per cent of one year’s worth of revenue.
“Australia’s total airline revenue is $23 billion, indicating that an equivalent effort in Australia would require a rescue package in the order of $4.6 billion instead of the $715 million proposed,” it said.
On Friday, the ACCC granted interim authorisation to allow Rex to co-ordinate with Qantas and Virgin Australia on 10 routes where they would normally be rivals. Those are:
- Wagga Wagga
- Port Lincoln
- Kangaroo Island
- Mount Isa