Opinion: Rex faces years in aviation purgatory

As I write this, in mid-February, the current Labor federal government faces a predicament with no good outcomes. Let Rex die, and watch a huge swathe of regional towns cut off from the economic heartbeat of major state capitals. Or, they could buy the airline at a likely huge cost and inherit a carrier that doesn’t have much in the way of functional aircraft. Of course, Australia’s rival regional airlines have promised to step in and take the load, but who knows if they are telling the truth? And, surely, if they had any business sense, they would only step into those routes that are pulling in the money.

Faced with a stick or twist dilemma, this month, Labor decided to play it safe and promised to nationalise the airline should no buyers emerge from a second round of bidding. Now, while I may look silly making a prediction for a print magazine, I’m confident in stating that no purchasers will emerge. Why? Who would be foolish enough to buy an airline with aircraft so old they could probably claim their bus pass? Actually, scrap that: who would be stupid enough to buy an airline that’s likely to be taken over by a government that would do the hard and dirty work of spending hundreds of millions of dollars in purchasing a shiny new fleet of turboprops in order to sell it off at a favourable rate in future.

The problem the federal government will have, of course, is exactly how they will get their hands on these new planes. Right now, simply getting any aircraft is difficult, with the post-COVID hangover of supply chain issues and skill shortages meaning that obtaining any kind of aircraft is next to impossible.

In reality, the situation reflects increasingly badly on the airline’s former management team, who indulged in the folly of leasing 737s to fly capital city routes at a time when its bread-and-butter business was in a state of disrepair. I don’t wish to quote Alan Joyce – actually, I’m lying, of course I do! – but he said it best back in 2021. “Rex likes to say that they are the most profitable airline in Australia, adjusted for size,” he wrote. “That’s a dubious distinction when you have failed to invest in your fleet, and propellers are literally falling off. What will Rex do in the coming years when its SAAB fleet reaches the end of its functional life?”

Ouch.

He continued, referencing their move into jet operations, “It’s a well-known fact in the industry that Rex has now chalked up another dubious honour. They have presided over the worst launch of a new jet airline in Australia’s aviation history, with empty aircraft and announced routes never flown. This despite them insisting now was the perfect time for such a venture and – like the knight from Monty Python – that any setback is just a flesh wound.”

Unfortunately for Rex, Joyce was right. The airline’s 737 routes were a catastrophic failure, while their ageing fleet – a can kicked down the route – has come back to haunt them. At the time of writing, the federal government has already invested $130 million in keeping the airline running, with no prospect of recouping that investment any time soon. With a federal election not due for months and aircraft years away, the airline is put in a kind of purgatory where it will likely remain for years to come.

It’s a crying shame for an airline built on the exploits of the great Hazelton and Kendell Airlines. Max Hazelton famously survived being lost in the Australian bush for a week after a plane crash – and all but declared dead – before rising to revolutionise the sector time and time again.

Even for the great maverick of aviation, he would struggle to find a way out of this malaise.