The collapse of Rex Airlines has raised fears that cities in the region could be cut off from the rest of Australia, with aviation experts blaming the company’s demise on its decision to compete with Qantas and Virgin on routes between major cities.
Regional Express Holdings Limited filed for voluntary administration late on Tuesday night, with up to 610 of its 2,000 employees facing redundancy.
Domestic flights between the capitals have been cancelled and rival Virgin Australia is offering affected customers free transfers.
Regional flights, often described as the lifeblood of rural Australia, are still operating for the time being.
“Regional flights are not affected by the administration and will continue to operate as normal,” a Rex spokesperson said.
But the assurance has done little to calm the fears of regional communities that rely on the airline for everything from hospital visits and mail to grocery shopping.
Residents of Birdsville, a small town in inland Queensland on the edge of the Simpson Desert, about 1,500 kilometres from Brisbane and with a population of just 100, fear being cut off from the rest of the world.
Regional Express Holdings Limited filed for voluntary administration late on Tuesday night, with up to 610 of its 2,000 employees facing redundancy.
Domestic flights between capital cities have been cancelled, but regional flights, often described as the lifeblood of rural Australia, are still operating for the time being (pictured: map of Rex Airlines routes, including those now cancelled)
They rely on twice-weekly Rex Airlines services to get mail and food, to reach larger centers for medical care or to take their children to boarding school in the city.
Mayor Francis Murray, who grew up in Birdsville and was once one of those boarding school students, is keeping a close eye on the future of the troubled airline.
“The ripple effect it would have on these small communities (if Rex flights were stopped) would be like the internet going down in Brisbane,” Murray said.
“It would affect everyone every day.”
Birdsville’s ‘milk run’ flights, which are subsidised by the Queensland Government, also serve other towns in the region including Charleville, Bedourie and Mount Isa.
Residents of Birdsville (pictured), a small inland Queensland town on the edge of the Simpson Desert about 1,500 kilometres from Brisbane and with a population of just 100, fear being cut off from the rest of the world.
The federal government said it would work with administrators to ensure the longevity of regional aviation.
But many fear for Rex’s future, particularly after the collapse of regional operator Bonza in April.
“Supporting regional aviation should be a national priority, enabling equal opportunities to stay connected regardless of where you live,” said Regional Capitals Australia Chair and Albury Mayor Kylie King.
Rex’s troubles come at a critical time, as rural populations grow and prepare for large-scale energy projects.
Flinders County in north-west Queensland is set to welcome workers for the construction of the 840km CopperString transmission line.
“The saying ‘build it and they will come’ has come true: we are building the infrastructure and the workers are coming,” said Mayor Kate Peddle.
‘However, we are now faced with the harsh reality that we potentially will not have planes to bring them here.
‘I am pleased that Rex Airlines has confirmed that we will continue our regional service, but the question remains: for how long?’
Concerns about Rex’s future also come at a time when regional Australians are facing a decline in essential services such as banking and healthcare.
Regions cannot afford to lose aviation as well, said Susi Tegen, executive director of the National Rural Health Alliance.
“Rural, remote and regional Australia generates two-thirds of the country’s export earnings and provides 90 per cent of the food Australians consume,” Tegen said.
“But we are not providing the infrastructure and economic levers that ensure rural communities continue to thrive.”
As flooding cut off major roads in the Queensland outback, the Rex service has been instrumental in getting supplies to the Simpson Desert Oasis hostel.
“We’ve been flooding here for months,” said operator Robbie Dare.
Aviation experts have argued that Rex’s problems stemmed from its decision to fight for capital passengers on major city routes.
“The average person on the street doesn’t realize how much we suffer here when it rains.”
Shaun Radnedge, mayor of Murweh Shire in south-west Queensland, said the council had a partnership with Rex to fly in key workers who were not based in Charleville, as well as tourists, mail and supplies.
“As far as our rural communities are concerned, this air contract to bring people into the communities is our lifeline,” Radnedge told The Australian.
“It offers us opportunities not only for jobs, but for medical transportation and things like that. It’s a vital service.”
Mr Radnedge said he had serious concerns for the future of towns like Charleville if Rex ceased to exist.
Their fears are shared by residents of the Western Australian town of Carnarvon, 900 kilometres north of Perth.
Merome Beard, who represents the North West Central constituency for the Liberal Party in the Western Australian Parliament, told the newspaper that the collapse of Rex would be “catastrophic”.
“We need the government to have a plan to ensure continuity of service,” Beard told the newspaper.
“There is a lot of anxiety in the community right now and they are looking for certainty about future services.”
Transport Minister Catherine King said her department had been in talks with managers about the possibility of supporting Rex.
“Rex is an important airline for regional and remote communities and its continuation is in the best interests of regional Australians, the travelling public, its workers and the aviation industry,” Ms King said.
This comes as aviation experts have argued that Rex’s problems stemmed from its decision to fight for capital passengers on major city routes.
The airline was looking to compete with Qantas and Virgin in the so-called “golden triangle” of flights between Sydney, Melbourne and Brisbane.
Rob Nicholls, associate professor and policy expert at the University of Sydney, said: SBS News The challenge Rex created for itself was to compete directly with Qantas and Virgin on urban routes, when it had initially been set up to fly only regionally.
“There is one major airline and one rival airline that is strong and well-funded, and it is difficult for a third player to compete directly when there are a limited number of people who want to fly between places,” he said.
Professor Nicholls said Rex found it harder to be agile in pricing in its new market.
“Rex had the challenge of being the new entrant on those routes and with a high cost base,” he explained.
‘We’ve already seen Bonza, its biggest problem was that the cost of leasing the aircraft was very high and it is precisely the same aircraft or type of aircraft that Rex has leased for those big city routes.’
