The government announced a $298 million bailout for regional aviation on Saturday morning – hours after a help-us-or-lose-us deadline imposed by Rex and eight independent carriers.
The package will include $198 million for regional airline routes to 138 communities and a further $100 million for related aviation companies that support the industry. It’s thought the package will last for six months and see service and security charges waived and fuel excise lifted back to its 1 February level.
The news comes 24 hours after Rex said it would struggle to transport coronavirus testing samples without a bailout, and eight regional carriers said the government had washed their hands of them.
Speaking in Wagga Wagga, NSW, Deputy Prime Minister Michael McCormack said, “Regional aviation has been smashed by COVID-19. It’s doing it tough.
“The Federal Government will step up as part of a now more than $1 billion package. There are 26,000 people employed in the sector.
“$198 million will subsidies the 138 communities that rely on regional aviation. They will be able to subsidise those routes. They’ll also be another $100 million for regional companies, and we’ll work with them on a case by case basis.”
He added the bailout was “for those people who rely on pharmaceuticals, for those people who rely on those medical supplies, for those people who need to get where they need to be”.
On Friday, Rex said it may not be able to transport COVID-19 testing samples from regional areas to capital cities for analysis unless it received a government bailout.
Australia’s largest independent airline said it would announce the “shutting down of its network” later that day if it hadn’t received “concrete proposals” of financial aid.
The statement further raised 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 underwrote 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.”