All eyes are on budget airline Rex with increasing speculation surrounding the airline's future in the Australian aviation market.
On Monday, the airline suspended trading on the ASX, with a spokesman said to make a major announcement about the airline's future within the next 24 hours.
As reported by The AustralianDeloitte restructuring partner Sal Algeri and Richard Hughes, who worked on Virgin Australia's administration, had been appointed to the firm.
Rex is a major player in Australia's domestic market, the carrier being the third largest in the country with services across 56 destinations.
While the airline serves many outlying ports as part of their network, they also dip into the ever-competitive Sydney-Melbourne-Brisbane routes.
In June, Rex cut fares between Melbourne and Perth to less than $100 one-way, in a bid to edge out rivals Qantas and Virgin.
Prime Minister Anthony Albanese told the ABC he and Transport Minister Catherine King had called for more information from the airline, adding that Rex was an “important airline” in the current climate, particularly after the collapse of rival budget airline Bonza.
“Rex is particularly important to regional communities and there are a number of communities where Rex is the only airline that serves some of those destinations,” Albanese said.
“There's a range of communities in New South Wales, in Queensland, in South Australia and around the country that rely on Rex … so it's important.”
A spokesperson for Rex, when contacted for comment, said the company was currently in an ASX trading halt “pending to make a material announcement”.
“In the meantime, it is not appropriate for us to make any further comment until such an announcement has been made,” the spokesperson said.
Although the trading halt has no impact on flights, it comes just over three months after budget airline Bonza fell into administration in April, leaving 323 staff out of a job.
The Transport Workers' Union (TWU) said around 2,000 workers have been thrown into limbo following the trade stoppage.
TWU national secretary Michael Kaine said it worked with Deloitte to get Virgin Australia back on the air and will do the same to “save Rex Airlines”.
“Aviation has suffered the colossal loss of skill and experience with thousands of employees gone and good, secure jobs reduced,” Kaine said.
“Workers, passengers and smaller regional carriers have borne the brunt of aggressive competition. We need a Safe and Secure Skies Commission to ensure that society's needs are met by a strong, stable aviation industry.”
Speaking on Channel 7's Sunrise program on Tuesday, Transport Minister Catherine King said the government was monitoring the situation.
“Regional Australians rely on Rex,” she said.
“It is an incredibly important airline; in many cases (it is) the only airline that goes to a number of smaller cities in the country and people are heavily dependent on it.”
“We are taking this very seriously and are very vigilant about what is happening and keeping an eye on the situation hour by hour.
“I want to reassure people that Rex is an important airline … and we are monitoring the situation closely.”
As reported by AAP, Rex Airlines in February reported a net loss of $3.2 million for the first half of the 2023/24 financial year due to rising costs, particularly for fuel.
However, it improved on the $16.5 million loss reported in the previous corresponding period.
After Bonza's collapse, Qantas Airlines chief executive Vanessa Hudson doubted there was enough room in Australia's domestic market for more than three airlines.
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“If you think about why three airlines are really struggling, it's a number of things. One is its our population…if you think about the United States…we have 26 million.
– The economics of being a viable airline, it's incredibly challenging. It's capital intensive, the second biggest challenge we have is carbon emissions, so it's important. We believe that all carriers in the market – no one can be a winner or a loser in terms of carbon dioxide emissions. Everyone should do it, it's the right thing to do.
“I don't think there is sufficient volume to sustainably support significant growth in the number of players.”
There will be more coming