Questions are looming over whether the federal government will step in to save Regional Express, also known as Rex, after the airline entered voluntary administration overnight.
Australia’s third-largest airline has canceled all flights between major city airports and grounded its domestic fleet of Boeing 737 planes.
Regional services remain unaffected and will continue to operate, with customers affected by cancellations on major city routes offered replacement tickets free of charge by Virgin Australia.
Treasurer Jim Chalmers said the Government had had “discussions” about whether taxpayer support should be used to assist the airline.
“Look, obviously there have been discussions. But I don’t want to pre-empt the company’s statement,” he told ABC News Wednesday morning.
He indicated the priority is to ensure “regional services continue” and assist employees who may lose their jobs as a result of the announcement.
“[Transport] Minister Catherine King is also talking to other airlines to ensure that if there are job losses, other airlines can also redeploy and redeploy some of their workers,” he said.
Greens leader Adam Bandt urged the government to step in and save the airline permanently by buying it.
“Transport is an essential service, so why not protect the people who rely on regional services by bringing this vital airline into the hands of the public?” he said on social media platform X.
Is there room for a third city airline?
On Tuesday, Prime Minister Anthony Albanese questioned the airline’s expansion into key capital city routes.
He noted that Rex has received significant public funding during the pandemic without “any conditions.”
“One of the things I expressed concern about was the lack of conditions, so Rex, for example, abandoned its traditional role as a regional airline for flights from, say, Sydney to Melbourne,” Albanese said.
National Senator Bridget Mackenzie accused Qantas and Virgin Australia of pressuring Rex after it launched its city routes in March 2021.
“Let’s not continue to pretend that Qantas’ behavior is acceptable in the aviation industry,” McKenzie said.
“Every time they are challenged, they try to make monstrosities of those airlines like Rex… who have tried to give Australians another way to travel.”
Virgin Australia CEO Jayne Hrdlicka said it was imperative Rex could support regional communities.
When asked if her repeated use of “regional” was code for Rex to stay out of capital cities, she denied the suggestion.
“It absolutely isn’t,” Hrdlicka told ABC News.
“We don’t want that history to be lost and we know how important it is for these communities to be connected to the rest of Australia.
“If Rex isn’t there to support them, it means we have a player who basically supports regional Australia, and we think that competition is very important.”
With additional reporting from the Australian Associated Press.