Significant job loses, apparently well beyond just the B737 operations, being touted in
this piece in
The Australian (behind a paywall).
Rex cancels jet services, over 600 job losses as unions call for federal fundingRobyn Ironside
Rex workers have now been briefed by administrators on 610 job losses across the Rex Airlines (RAL) and Regional Express Holdings (REX) businesses, the Transport Workers Union says, pushing again for the government to step in with an equity deal.
The RAL business, which services 737 flights in capital cities, will cease to operate, with 360 jobs to be made redundant. The voluntary administration process for Rex, which operates regional routes, will continue, though 250 job losses have also been indicated.
A consultation process on job losses has commenced but will conclude on Wednesday, at which point the total job losses will be confirmed, the TWU said.
The TWU earlier on Wednesday called on the Federal Government to look into an equity stake in Rex to maximise remaining jobs, protect worker entitlements and ensure a seat at the table to protect regional Australia.
The failure of Rex just three months after budget carrier Bonza collapsed, has triggered a wave of reaction and calls for change in Australia’s aviation industry.
Ernst & Young (EY) was appointed voluntary administrators to Rex on Tuesday night, prompting the immediate suspension of the airline’s jet operations between major cities.
Regional services flown by Saab 340s will continue for now, and Virgin Australia offered to rebook Rex customers affected by the suspension of 737-operated f lights free of charge.
Samuel Freeman, Justin Walsh and Adam Nikitins of EY will handle the administration which came just three months after Bonza’s failure.
Airports, unions and travel industry leaders expressed their disappointment in the news about Rex, as Virgin Australia CEO Jayne Hrdlicka described it as a “difficult moment” for aviation and a reminder of the challenges they faced.
“The team at Virgin Australia is thinking about everyone at Rex today, an airline with a proud and important role in Australian aviation, particularly for regional Australia,” said Ms Hrdlicka.
Qantas also weighed in, offering to reaccommodate Rex customers on corresponding Qantas or Jetstar services without cost where seats were available.
Sydney Airport CEO Scott Charlton said they were pleased regional operations were continuing, but it was clear some things needed to change in the Australian aviation market for competition to thrive.
“Recent history suggests the barriers are too high,” said Mr Charlton. ”We have a rare opportunity to get this right with the proposed slot reforms at Sydney Airport and through the imminent aviation white paper, and we remain ready to work with the government on implementing both.”
A Melbourne Airport spokesman said they were deeply disappointed by the suspension of Rex jet services, and stood ready to assist passengers.
“Melbourne Airport was proudly home to Rex’s largest 737 jet base and our thoughts are with the staff affected by this announcement,” he said. “The team at Melbourne Airport will continue to work hard to facilitate new entrants to the Australian market because of the benefits they bring to consumers.”
The Transport Workers Union called on the federal government to look at an equity stake in Rex, to protect as many jobs as possible and entitlements for those facing redundancy.
Rex employed 2000 people across its operations but it was unclear how many would be affected by the suspension of Boeing 737 flights. Australian Travel Industry Association chief executive Dean Long said Rex had been a lifeline for much of regional and rural Australia and its entry into administration was a significant blow.
“We remain hopeful that Rex is able to navigate this challenging period and emerge to trade again,” Mr Long said.
Editor of Executive Traveller David Flynn said the end of Rex’s 737 ambitions following Bonza’s collapse would be widely seen as proof Australia really could not sustain more than three airlines.
“Rex expected Qantas to be its major competitor, but the Flying Kangaroo widely kept its distance and handed the fight to Jetstar and Virgin Australia,” said Mr Flynn.
“Rex added a welcome dash of competition on the key intercity routes, but its midmarket position was undercut in price by Jetstar, while Virgin Australia tended to match Rex lead-in pricing but offered a superior proposition in frequency, lounges, frequent flyer perks and overall value.”
Although the halt in jet operations would cause significant disruption to travellers, the continuation of regional services would come as a relief to those townships where Rex provided the only commercial flights.
Local Government New South Wales president Darriea Turley said one of the key determinants of populations remaining in regional and rural areas was access to reliable and regular connections to metropolitan areas.
“Losing regular passenger transport services would also have a devastating impact on rural and regional economies,” said Cr Turley.
“The first priority is maintaining services, competition is not the key issue at this stage, although it remains an underlying problem.
“LGNSW would urge the Australian Government to continue to work with airlines to sustain services on routes that are otherwise not economically viable.”
The Australian Services Union also emphasised the importance of regional services as a major driver of quality local jobs.
“This is obviously a worrying time for hundreds of workers and the ASU will be advocating for their interests and ensuring their voices are heard during this critical time,” said ASU assistant national secretary Emeline Gaske.
“It’s particularly concerning that Rex has been placed into administration so closely after the collapse of Bonza – another airline that provided services to regional locations.”
EY emphasised that the Pel-Air air ambulance services operated by Rex, and the Australian airline pilot academy remained outside of administration and were under the control of their respective directors.
Virgin Australia urged Rex customers with travel in the next 48 hours to contact their call centre on 13 67 89.
“Our team is now moving quickly to support Rex’s customers and people,” said Ms Hrdlicka.
“Customers will need to contact Virgin Australia before August 14, 2024 to take up this offer.”