Rex has revealed it’s now in advanced discussions to launch flights to a number of cities it says have been “abandoned” by Virgin’s decision to trim its network, including Port Macquarie and Canberra.
The update comes after Virgin recently revealed it would stop flying to a number of regional destinations including Albury, Tamworth, Hervey Bay, Mildura and Cloncurry. It meant some faced having only one carrier providing services.
Rex’s general manager for network strategy, Warrick Lodge, said on Thursday, “Rex has been in discussions with community leaders and government representatives desperate for an airline to fill the gap left by Virgin Australia.
“These communities are concerned about being left with a monopoly airline and the impact this could have on flight schedules and fare pricing, particularly when their local economies have already been hit hard by the COVID-19 pandemic.”
However, the bullish statement went on to reveal that it wouldn’t consider serving cities “such as Tamworth, which insist on charging security screening charges on carriers not legally required to be screened”.
In 2019, the federal government paid $50 million to buy screening equipment for 64 terminals in regional Australia, however, didn’t cover the cost to pay for the staff who operate them.
This has led to the controversy of some airports apparently choosing to pass that cost onto carriers or consumers.
A Senate inquiry subsequently ruled there was “considerable danger” that regional airports would be forced to close over the issue.
“As regulations dictate that security screening is not required for Rex’s aircraft, Rex calls on all local government to avoid imposing unnecessary security levies at regional airports that will ultimately be passed on to passengers by way of increased ticket prices,” said Lodge.
“We need to rebuild passenger numbers back to pre-COVID levels and imposing unnecessary security costs on to ticket prices will work directly against that process.”
Rex’s latest release comes after it asked for expressions of interest from towns and then declared it considered itself to be “without peer in the world of regional aviation”.
Separately, the airline is also in advanced negotiations with an APAC investment firm to secure $150 million so it can launch flights between Sydney, Melbourne and Brisbane in March next year.
The deal would see PAG Asia Capital initially invest $50 million in secured convertible notes that could allow it to hold 23 per cent of Rex’s shares by December.
Rex’s executive chairman, Lim Kim Hai, said, “With PAG’s support, I have every reason to believe that Rex can successfully launch its domestic major city jet operations.”
The airline first announced in May, its ambitious plans to take on Qantas and Virgin by expanding its network to service Australian capital city routes and speculation later linked the airline to the lease of 10 Boeing 737s from Virgin Australia.
The 10 flight routes axed by Virgin earlier this month are:
- Brisbane–Port Macquarie
- Mount Isa–Cloncurry
- Sydney–Hervey Bay
- Sydney–Port Macquarie
- Sydney–Nuku’alofa, Tonga