Taxpayers may end up bailing out beleaguered Rex Airlines because of the importance of its services to regional communities.
Federal treasurer Jim Chalmers expressed relief that Rex will keep servicing regional areas despite announcing it had gone into administration on Tuesday.
WATCH THE VIDEO ABOVE: Rival airline steps in to help Rex customers.
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And he has vowed to “contemplate” and “consider” any “warranted and responsible” action that would see Rex’s regional routes continue long-term, as well as saving the jobs of hundreds of people at risk of unemployment from the Australian company’s looming collapse.
“These are really concerning developments for Rex and for its workers, and also for the communities that it serves,” Chalmers told Sunrise on Wednesday.
“Our priority here needs to be to make sure that these regional services can continue because we know how important it is that we get these flights to regional communities.”
He said there had already been “discussions” with Rex about a “support package”, but he would not pre-empt the outcomes of future talks with the company and administrators.
More than 600 people are set to lose their jobs, according to the Transport Workers’ Union, after Rex announced on Tuesday that it had gone into voluntary administration.
“This is another dark day for aviation, with over 600 families faced with sudden joblessness in an industry that has taken hit after hit,” union boss Michael Kaine said.
Rex’s regional Saab 340 flights are unaffected and continue to operate but the 737 services — which cover major cities, including the busy Sydney-to-Melbourne route it began operating in 2021 — have been grounded.
By Wednesday morning, some 4600 people had reached out to Virgin Australia to book new flights after the rival airline stepped in to help those left in limbo by Rex’s decision to cancel trips between airports of major cities.
A statement posted on Rex’s website late on Tuesday said the administration affected parent company Regional Express Holdings Limited and a number of its subsidiaries trading under the Rex Group name.
Samuel Freeman, Justin Walsh and Adam Nikitins of Ernst&Young Australia have been appointed joint administrators by the Rex board.
Rex and Virgin Australia are also exploring ways to support regional customers, including Virgin selling Rex’s regional services through codeshare or interline arrangements, and making Virgin frequent flyer benefits available to Rex’s regional customers.
It’s the second Australian airline to go into administration this year, after Queensland-based Bonza made the call in April.
– With AAP
