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An Australian-based bidder for Rex would see the regional airline become part of a resurrected TAA.
Renaissance Partners, which is looking to buy Rex as its sale process nears an end, has acquired the branding IP for TAA (Trans Australia Airlines), formerly a government-owned domestic airline before it was renamed Australian Airlines in 1986 and subsequently merged with Qantas in 1992.
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In a vision document seen by Australian Aviation, the consortium proposes a “third national carrier” with a northern hub in Darwin and a southern hub in Canberra, both of which are not designated as major gateways and are thus not heavily restricted under bilateral air service agreements (ASAs).
Speaking exclusively to Australian Aviation, chief executive Andrew Cochrane said the new TAA would be an “end-of-journey service” and a “distribution partner” for international airlines.
“We see Australia as a destination. To us, that’s where the potential is. The potential of Australia as a destination is enormous,” he said.
“It’s in the billions and billions of customers, whereas the other way around, it’s 26 million. It’s capped, it’s done.
“So, TAA is the thing that connects through from international arrivals in Northern Australia and distributes through the rest of the country, because the rest of the country, essentially everywhere, is four hours from Darwin.”
According to Cochrane, the new TAA would have “little to zero” interest in competing with Qantas Group and Virgin Australia on the Sydney–Melbourne–Brisbane Golden Triangle, as Rex had with its 737 operations before entering administration.
“We’re not interested in competing with anyone and our model doesn’t compete with the incumbents – we are providing choice, and the customer then gets to choose what they want to do,” Cochrane said.
“We’re building a national, regional network with choices with different travel modes and options including destinations and plane types. Australia is a very big place, and it takes a long time to get around.
“Currently, having to come in through the East Coast, you spend a lot of time – not always, but a significant number of times – backtracking to get where you want to go, because Sydney or Melbourne isn’t your destination that day.”
Under Renaissance’s plan, Rex would continue operating its current regional network while gradually becoming an arm of the new TAA. According to Cochrane, Renaissance would look to replace its ageing Saab 340B aircraft with new electric planes when they are certified and available.
“It is worth noting the existing Saab airframes are only halfway through their lives, so whilst maintenance goes up as they get older, they are perfectly serviceable,” he said.
“In the meantime, we will invest in the existing fleet so more can be operational. We need to plan that these planes are part of the fleet and replaced by, say, 2035. Our investment program is to maintain them as part of the fleet until then.”
Renaissance’s bid, which, according to The Australian Financial Review, has received a “lukewarm” reception from the government and Rex’s administrator EY Australia, comes amid reports that US-based firm Anchorage Capital Partners is looking to purchase the airline.
According to Cochrane, Renaissance’s plan has the advantage of keeping Rex in Australian hands.
“We have a deep interest in making Rex a really sustainable, fantastic airline – we care about it deeply.”
“It’s beyond money, if that makes sense. This is not a thing we’re doing just to make a return; it has to be a great service first, and customer service is a big deal for us.
“A commercial return is important, it’s part of the picture – but it’s not the whole picture. It’s really about people: moving people, engaging people, building communities, connecting them, business opportunities, growth, et cetera.
“That’s what we’re interested in, because if you get that right, the rest follows.”
The federal government has previously indicated it would look into purchasing Rex itself if the current sale process, ending on 30 June, falls through, making it the first nationalised airline in Australia since the privatisation of Qantas in the 1990s.
“The Australian Government would like to see a successful market-led outcome for Rex and continues to support the voluntary administration through the sale process, which is still underway,” a spokesperson for Transport Minister Catherine King told Australian Aviation.
EY Australia has sold aeromedical division Pel-Air to Japan-owned Toll Aviation and was in November reportedly looking to sell Rex’s flight school in Wagga Wagga, while FIFO airline National Jet Express has been snapped up by former Rex executive chairman Lim Kim Hai.
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says:Electric aeroplanes in commercial service capable of operating the distances in Oz and, most likely they will apply for subsidy as well, – sorry, can’t see that happening but it will increase the profile of the intended applicant