iscover
Regional airline Skytrans has said the decision to extend Rex’s administration to next June is holding it back from moving into its beleaguered rival’s routes.
Speaking to Australian Aviation, CEO Alan Milne argued regional carriers are in limbo, unsure whether to launch flights now or wait for the carrier’s ultimate fate to be decided.
This content is available exclusively to Australian Aviation members.
A monthly membership is only $5.99 or save with our annual plans.
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
His comments come after The Australian Financial Review reported the government is also considering buying out investment firm PAG’s debt from Rex to have more say over the outcome of the administration process, which has been extended to the end of June 2025.
“We were waiting for that decision in November, and then to [have them] say, ‘Oh, actually, we’re pushing it to June’ puts us in a difficult position,” Milne said.
“We have to now re-strategise: do we push ahead regardless, assume that they’re either one, not going to make it, or two, that they’re going to come in at a much lesser capacity? Or do we just not do anything and watch the airplanes get sold offshore, never to be seen in Australia again?
“It is a difficult position. From a strategy perspective, it makes it very difficult for us – we had a strategy in place ready to go, two different strategies for the November decision, and now that’s been pushed out till June.”
Milne backed up earlier comments, as well as assertions from fellow Queensland airline Hinterland and Victoria’s Sharp Airlines, that regional carriers have “plenty of capacity” to take over Rex’s routes, and said there will be more aircraft available with QantasLink selling off many of its smaller Dash 8s in favour of Q400s.
“If we needed to stand up additional flying, we can do that pretty quickly. We’ve got access to more aeroplanes, we’ve got our own internal training organisation, so we can pump pilots through pretty quickly, especially if they were ex-Rex pilots where they only need a Dash 8 type rating. We can do that in a matter of weeks,” he said.
“We’ve got the capability, as do a lot of other airlines – everyone’s there ready to stand up and put this additional capacity into the market if it’s needed.
“So, we’re a little bit surprised that the government’s just ploughing more and more money into what was essentially a failed business model.”
While Milne was sympathetic to the government’s argument that Rex operates an essential service to regional and remote communities, he said other carriers will be able to plug the gap, but that he was “stonewalled” by the government on the subject.
“I agree with them about the communities and the requirements for there to be an air service. Absolutely. I disagree with them that it has to be Rex,” Milne said.
“My first preference would be that Rex was returned to flying as a profitable, well-run, well-managed airline, and not necessarily at a huge cost to the Australian taxpayer. I’m not sure that can be done.
“All we’ve been trying to do is put our hand up and say, ‘hey, we’ve got a solution here. We can help, we can expand, here’s the time frame in which we’ll do it’. We’ve got all that information, but we haven’t been able to get an ear from the government at this point.”
Rex entered voluntary administration at the end of July, with estimates it owed around $500 million to 4,800 creditors after its failed venture into competing with Qantas Group and Virgin Australia on domestic jet operations.
The government has since propped up the ailing carrier, including by guaranteeing its regional bookings and preserving its slots at Sydney Airport; it has also provided Rex with an $80 million funding injection to keep flying as administrator EY Australia works to make a sale.
Transport Minister Catherine King’s office has been contacted for comment.
