Around 610 jobs have been lost at Rex Regional Express, Australia’s third largest airline, following the news that it was entering voluntary administration after it tried, and failed, to take on Qantas and Virgin Australia with domestic flights between Australia’s capital cities.
As its name suggests, Rex started life as a small regional carrier. While the airline is abandoning its capital city flights with immediate effect, regional flights on Saab 340 planes will continue for the time being, at least.
Rex confirmed on Wednesday that it had appointed Ernst & Young as administrators in an attempt to salvage the beleaguered business. The administrators’ first task was to suspend Rex’s failed Boeing 737 operations on main trunk routes.
The decision to abandon capital city flights means that 360 employees have been made redundant with immediate effect, while the administration process will result in the loss of 250 jobs from the airline’s regional airlines business.
The administrators launched a lightening fast consultation process on the redundancy programme and the job losses were confirmed within just one working day.
The National Secretary of the Transport Workers Union, Michael Kaine, called it a “dark day for aviation,” adding: “Administrators have acted swiftly to provide clarity to workers, though it is not the news workers hoped for.”
“We are working to secure job opportunities at other airlines and aviation companies for ground crew, cabin crew and pilots, and have had positive conversations with Virgin Australia and ground handler Dnata,” Kaine continued.
The TWU has called on the Australian government to take an equity stake in Rex to ensure the airline keeps flying, although, on Wednesday, Transport Minister Catherine King was only willing to commit to working with the administrators “to make sure regional Australians stay connected.”
Rex started life as a regional carrier connecting small, underserved rural communities using turboprop aircraft. The carrier had found success with this business model but during the pandemic, the airline acquired six Boeing 737 in an attempt to compete with Qantas and Virgin Australia on domestic trunk routes such as Sydney – Melbourne.
The airline struggled to compete with Qantas and Virgin Australia, who have been accused of capacity dumping and starting a price war with Rex. In recent weeks, sources claim Rex was losing as much as AUD $1 million per week.
Rex has reached a deal with Virgin Australia to carry its stranded passengers at no extra cost, while Qantas said it stood ready to assist Rex passengers. The Australian flag carrier commented on the news: “This is a challenging day for our industry and we are sad to see Rex enter voluntary administration”.
The airline did not, however, respond to claims that it was partially responsible for the demise of Rex’s domestic network and resulting job losses.
