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Rex’s ageing fleet has put it in a “tough position” for a potential recovery, according to the CEO of rival regional airline Skytrans.
Speaking to Australian Aviation, Alan Milne revealed his “gut feeling” is that the age of Rex’s Saab 340B turboprops – which are around 30 years old on average – could make it more difficult for administrator EY Australia to sell the airline.
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“The routes are good, don’t get me wrong, there’d be a good opportunity there, but the actual fleet is an issue for them,” he said. “I tend to think that’s going to be their biggest challenge.”
Rex entered administration in July, halting its 737 capital city services but maintaining its regional connections serviced by its smaller aircraft. However, administrator EY has seemingly yet to find a buyer, with a source claiming late last month that no obvious candidates have emerged.
“From what I’m hearing, a lot of the Saab fleet is unserviceable,” added Milne. “I knew they were having problems with engine components, and they’re an ageing aircraft.
“I think the biggest challenge for not just Rex, but for the administrators, is trying to find someone that is willing to take that fleet over.”
The airline currently has a fleet of around 57 Saab 340Bs with an average age of 30.2 years. It’s currently thought that 34 of these are in active service, and the rest are parked.
Milne believes that should Rex fail, smaller carriers like Skytrans in Queensland and parts of NSW, Sharp in Victoria, Nexus in WA, and Link Airways and FlyPelican in NSW could ultimately take over its routes.
Sharp Airlines has already indicated it could lift its capacity to King Island in Tasmania, while Skytrans has previously stepped in to plug a gap left behind by Rex on Cairns–Bamaga.
“Rex isn’t the only regional airline in Australia. There’s a lot right across the continent, and we’ve been in a position of trying to fill routes that Rex couldn’t service previously. The Cairns to Bamaga route, for example, Rex pulled out of and we jumped in as quick as we could, just to make sure Bamaga still had an air service,” said Milne.
“The point we’re trying to make is that there is a lot of capability to provide capacity if needed … if there’s opportunity there, I am absolutely, 100 per cent confident that that will be filled. How quickly we can all do that, that’s going to come down to how quickly we can introduce new aircraft.
“That includes the financial burden of the capital outlay for a purchase, or even to lease airplanes in, there’s a financial burden on deposits, upfront payments, et cetera. How quickly we could bring the aeroplanes in would be dependent on how quickly we could raise that capital.”
Skytrans was purchased by global aviation firm Avia Solutions Group earlier this year, with plans to expand the airline into wet-leasing.
Milne’s query of Rex’s fleet comes after Australian Aviation revealed in September that the carrier was trying to sell four aircraft operating key regional routes before entering administration.
The decision, which was subsequently reversed, came despite Rex cutting services because of a lack of aircraft parts and labour.
Rex has also been accused of stealing four Saabs from an Arizona boneyard in 2020, with American leasing and maintenance firm Jet Midwest suing the carrier in the NSW Supreme Court for allegedly stripping the planes for parts despite not having paid for them in full.
Scott Casson
says:This is a very rich comment from Skytrans considering the age of there own fleet.