Rex slashes flights to the bush by 45pc, and more cuts ahead

Rex cancelling half its flights to ride out coronavirus turbulence

Coronavirus
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Cuts planned to Rex services from the end of the month include ending flights to Port Augusta, Newcastle, Ballina and Armidale.

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Regional Express has followed through with its forewarned cuts to its 1500 weekly air services, almost halving passenger capacity across its country network because of coronavirus.

The proposed cuts, from April 6, include halting all flights to and from Port Augusta in South Australia and Newcastle and Armidale in NSW in the first stage of what it conceded were "drastic schedule reductions".

The airline had earlier decided to quit its Ballina to Sydney route from March 29 and its Kangaroo Island to Adelaide service from July 1.

Of services reviewed so far, only King Island in Bass Strait and Cooma and Narrandera in southern NSW will retain their existing capacity.

WA, Qld review continues

West Australian routes are still under review, as are all Queensland services except flights to and from Cairns, which will reduce from eight to six.

The service cuts will also have implications for jobs at the airline and at regional airports.

If the situation worsens we may be forced to further reduce capacity in the interests of maintaining essential regional air services - Warwick Lodge, Regional Express

Earlier this week the company said it feared how regional carriers would survive the coronavirus impact on travel activity across Australia, with the economic hit expected to continue for nine months.

Although Rex has been profitable and largely debt-free, chief operating officer Neville Howell said the big country carrier anticipated at least a 25 per cent slump in passenger demand for six months and it would struggle to survive the global health emergency if medical experts' predictions proved correct.

Rex's share price tumbled about 30pc this week from 83 cents to 55c by mid-Friday after the airline's bosses said they "could not even begin to comprehend what the economic impact of coronavirus might be" if infection rates lifted into high double digits during winter.

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The carrier's most frequented airports such as Port Lincoln and Wyalla in SA and Dubbo, Griffith, Orange and Wagga Wagga in NSW which handle from about 30 to 52 weekly return services, will see departures cut by about half.

Rex's 27 return flights from Melbourne to Burnie in northern Tasmania will shrink to just seven.

The 18-year-old company currently flies to 60 destinations throughout all states, but will reduce capacity by 45pc.

General manager of network strategy and sales, Warrick Lodge, said the operating environment was extremely fluid and the company would monitor the market closely.

"If the situation worsens we may be forced to further reduce capacity in the interests of maintaining essential regional air services," he said.

More cost cuts sought

However the capacity reduction alone would not be enough to weather the economic storm and the company had asked local airport operators to reduce airport charges as well as seeking a raft of commitments to cut state and federal regulatory costs on airlines.

To keep operating costs to a bare minimum for the reduced services to be sustainable the company had asked local airport operators to reduce airport charges.

The regional carrier had, however, been greatly heartened by the support of many country communities and local governments, like Parkes Shire Council, which was scrapping airport charges during Rex's hour of need.

NSW Farmers had also leapt to the support of regional airlines applauding the federal government $715 million domestic industry support package, which included temporarily removing regional aviation security charges and aviation fuel excise.

Farmers' support

President James Jackson said regional air services were vital for farming and rural communities, particularly in relation to accessing health services in larger centres and cities.

"Air services to state's Far West have only recently been reinstated, cutting travel time significantly and providing another option for visitors to come to the region."

In addition to passengers, regional air services carried business inputs from capital cities and between regional centres and mail to isolated communities.

Rex's Mr Lodge said the airline promised it would repay the support it had received from local councils when the company was solidly back on its feet, "standing by these local councils in their moments of adversity".

Grateful to workers

Management was also grateful and comforted that all unions and staff were firmly supportive of the "draconian measures that need to be implemented in these dire circumstances"

Rex believes with our staff clearly standing behind us and with virtually no debts and now with the government assistance announced on Wednesday, we will be able to survive at least six months if the current situation does not deteriorate much further

State governments should follow the example of the federal government, waiving relevant fees and taxes, - John Sharp, Rex deputy chairman

However, the airline said it was disappointed the relief package from Canberra did not include a sovereign guarantee of new loans taken up by regional carriers to tide them through the period of extreme negative cash flow.

It hoped this would occur in a second stage package.

Meanwhile, the airline's deputy chairman and former federal transport minister, John Sharp, has also called on state governments to invest in their regional air services.

He warned if Rex collapsed, many regional ports may never again have an air service as few had the efficiencies and management expertise of Rex.

"State governments should follow the example of the federal government, waiving relevant fees and taxes," he said.

"Payroll taxes should be waived for one year. This would make a considerable difference between survival and failure of the regional airline operators."

  • Proposed Rex weekly return flight changes from April 6.
  • Adelaide network: Broken Hill, 18 to 11; Ceduna, 12 to 6; Coober Pedy, 7 to 3; Mildura, ad hoc reductions; Mount Gambier, 18 to 12; Port Augusta, suspended; Port Lincoln, 52 to 27; Whyalla, 28 to 12.
  • Melbourne network: Albury, 18 to 12; Burnie, 27 to 7; King Island, no change, 7; Merimbula, 12 to 8; Mildura, 20 to 17; Mount Gambier, 18 to 12; Wagga Wagga, 15 to 12;
  • Sydney network: Albury, 25 to 12; Armidale, suspended; Bathurst, 18 to 12; Broken Hill, 18 to 12; Cooma, no change, 6; Dubbo, 30 to 18; Grafton, 18 to 11; Griffith, 37 to 24; Lismore, 18 to 11; Merimbula, 19 to 12; Moruya, 19 to 12; Narrandera, no change, 19; Newcastle, suspended; Orange, 29 to 17; Parkes, 18 to 12; Wagga Wagga, 31 to 13.
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