Rex Airlines in crisis: A major setback for regional operators & communities
Industry leaders react to news of yet another blow to the visitor economy in regional Australia
Hotel industry leader David Mansfield, Chair of the National Board of Accommodation Australia (AA) and Managing Director of The Ascott Limited Australasia said: “The Visitor economy in regional Australia is already doing it tough, and this is another blow. Rex is a lifeline for travel in and out of the communities we operate in and often provides the only air option.”
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The Australian regional airline based in Mascot, New South Wales, which has been a crucial lifeline for rural towns, connecting them to major cities, has grounded its Boeing 737 jets, affecting flights between major capitals. However, it has pledged to continue its regional services, a vital link for many remote areas.
The collapse of Rex’s mainline operations follows a challenging attempt to compete with major airlines like Qantas and Virgin on key routes, resulting in substantial financial losses. This situation threatens up to 850 jobs, including 600 from capital city operations and 250 from the regional arm.
For many regional areas, such as Albany, Esperance, Carnarvon, and Exmouth, Rex provides the only air link to Perth, essential for accessing critical medical services and other needs.
Senior Lecturer, Tourism, Hospitality and Event Management, La Trobe Business School, Dr Paul Strickland called on the Federal Government to guarantee aviation services to regional areas.
He said: “The impact of the cost of living is taking its toll on companies which have little margins such as Bonza and Rex. Aviation fuel, plane maintenance and the cost of daily operations are all increasing, putting pressure on an industry that is still struggling after the COVID-19 pandemic. Simply charging a higher ticket price is not the solution long term.
“It is the Federal Government’s responsibility to ensure essential services to regional communities but that does not necessarily extend to the aviation industry. Support packages are welcomed but not a long-term solution.
“The only way the aviation sector can guarantee services is if the government owns a controlling share of the airline.”
Virgin Australia Group CEO Jayne Hrdlicka acknowledged the gravity of the situation, stating, “This is a challenging moment for Australian aviation.
“It is a stark reminder of the tough nature of our industry. Our thoughts are with everyone at Rex today, an airline that has played a proud and crucial role in Australian aviation, especially for regional Australia.
This situation highlights broader issues in the aviation industry, with calls for regulatory changes and government support.”
Adding to the urgency, Australian Resident Accommodation Managers Association (ARAMA CEO Trevor Rawnsley emphasised the broader implications for regional accommodation businesses and operators stating:
“In relation to Rex and prior to Rex’s demise Bonza. We know that bums on seats equal bums on beds, so we encourage the State and Federal Governments to support continued transportation to regional providers to overcome the tyranny of distance. Tourism brings great economic benefits to regional areas and the quicker these services are reinstated, the better.”
The Australian Travel Industry Association (ATIA) CEO, Dean Long, also stressed the importance of Rex to regional Australia, stating: ““Rex Airlines has been a lifeline for much of regional and rural Australia, ensuring these communities stay connected to the rest of the country. Rex’s entry into administration is a significant blow not just for these areas but also for the competitive landscape of Australian aviation.
“We remain hopeful that Rex is able to navigate this challenging period and emerge to trade again. In the meantime, your travel professional is doing everything they can to work through your options.”
In response, Virgin Australia is offering support to affected Rex customers and employees. Impacted passengers will be rebooked on Virgin Australia services at no additional cost, and those with travel plans within the next 48 hours are advised to contact the Virgin Australia Guest Contact Centre. The airline is also extending an offer to Rex employees, encouraging them to apply for open positions via an expression of interest form on its website.
Virgin Australia CEO, Jayne Hrdlicka also highlighted a potential partnership with Rex’s regional business, which could provide access to Virgin Australia’s domestic and international network through future codeshare or interline arrangements. This partnership could be a critical step in maintaining regional connectivity, which is vital for the economic and social fabric of rural Australia.
The Transport Workers Union has called for federal government intervention to secure the future of Rex’s regional operations and ensure the payment of entitlements to affected employees. This crisis highlights the vulnerabilities facing regional air services in Australia. The coming days will be crucial in determining the future of these essential services and the livelihoods of many Australians who depend on them.
Mandy has almost two decades of accommodation and tourism industry writing experience and is Editor of AccomNews & Resort News, Publisher of SchoolNews & Director of Multimedia Pty Ltd. She is a retired registered nurse with a 25-year NHS career that followed a few unforgettable years in hotel housekeeping.
