Opinion: Is it time for ‘TAA 2.0’?

Readers, at this point I’d stick to my knitting, but I never learned how to knit in the first place.

At time of writing, we once again don’t know what’s going to happen to Rex, though odds seem good that it has a better shot at surviving than Bonza, given it owns all of its Saab 340 planes and its regional operations are still flying (albeit with many of said Saabs grounded due to parts shortages). Some interesting ideas have been floated, however, about who could step in to save the airline. In particular, the federal government has been providing limited assistance and has been indicating it wants to “have a say” in Rex’s future. Could this, possibly, end with something we haven’t really seen since the privatisation of Qantas: the government having a significant stake in, or possibly even ownership of, an Australian airline?

The Transport Workers Union certainly seems to think it’s time for that to happen – shortly after Rex went into administration, national secretary Michael Kaine was calling on the government to take an equity stake in the airline to “protect as many jobs as possible, entitlements for those facing redundancy, and to provide a voice for regional Australia”.

“The federal government has sent positive signals that it does not intend to leave regional Australia in the lurch. An equity stake would serve workers, regional Australia and taxpayers now and into the future,” he said.

The Greens, meanwhile, have gone even further, with leader Adam Bandt tweeting: “The Prime Minister should consider just buying Rex Airlines. Transport is an essential service, so why not protect people who rely on regional services by bringing this critical airline into public hands?”

Here comes the new TAA, different from the old TAA

It’s an intriguing proposition, to say the least, and there’s a solid argument for the government to be investing in or controlling a regional airline. Like it or not, Rex has become critical infrastructure for a lot of regional areas across the country, with people in small towns relying on its (often already-subsidised) services to get where they need to go, be that for work, medical needs, or simply visiting family and friends in other towns or the big smoke without having to drive for hours on end.

The argument goes, then: if it’s an essential service and critical infrastructure, then shouldn’t it be run that way? After all, the government already runs public buses and trains to regional areas – why shouldn’t it run airline services, which are just as important to those communities? It was this view more generally that first led the Chifley government back in the 1940s to set up the government-owned domestic carrier TAA (later Australian Airlines) of old, believing that a public airline would prove just as vital to the public interest as trains, hospitals, or Australia Post.

Such a “TAA 2.0” – be it Rex or anything else – would of course likely look very different from TAA 1.0. Trunk services between capital cities, like Rex had gamely tried to do before it folded, would likely be out of the picture at least at first, as the government focused on the meat-and-potatoes of ensuring those all-important links between regional towns were able to persist at reasonable airfares. It would more or less guarantee those links, too – as a public service, TAA 2.0 would be less constrained by the need to make a profit and would be far less at risk of going under given the government could pump as much money as it needed into the business to keep it afloat.

With an expanded fleet (and, as an aside, whoever takes over Rex’s fleet, it will certainly need to look at renewing those decades-old Saabs, possibly with some nice new ATRs or Dash-8s), it could even look at expanding its regional map to cover places a publicly-listed company might find to be too much risk for too little reward.

(And whisper it, maybe: a government-run Rex or TAA 2.0 would probably be able to avoid some of publicly-listed Rex’s worst habits, like boardroom intrigue or picking baffling fights with local councils every other week.)

Mind you, later on down the line, if TAA 2.0 decided it was time to bring down those capital-city airfares and have another tilt at running domestic jets… well, I hear Qantas may be looking to replace some old 737-800s in the near future. A man can dream, can’t he?

Perhaps I should learn to knit.