Interview with Sunrise, Channel 7

NATALIE BARR: Well, in what feels like an unfortunate case of deja vu, Rex Airlines is on the brink of collapse now after losing close to $1 million a week on its ambitious expansion into major city routes, the regional carrier has entered a trading halt on the Australian Stock Exchange after failing to return a profit since the pandemic. It comes not long after the collapse of Bonza Airlines in April, of course, with fears now growing the loss of another airline could lead to higher prices. And for more, we’re joined by Transport Minister Catherine King. Good morning to you.

CATHERINE KING: Good morning, Nat.

NATALIE BARR: Catherine. We know the Federal Government does not save every business in trouble, but with Rex here, they are the only airline that go into several regional centres. Is the government thinking of helping here?

CATHERINE KING: Well, I mean, the first thing is we’ve got to find out what’s actually happening. Tomorrow, Rex will need to report to the ASX. It’s obviously put itself into a trading halt, so it’s not trading its shares. We’re in touch obviously with Rex, and we expect them to inform both ASX and then its customers tomorrow about what is actually happening. There’s a range of reasons why trading halts are put on companies. It does happen, but we’ll get some further information.

But you are absolutely right. Regional Australians still rely on Rex. It’s an incredibly important airline. In many cases, it’s the only airline going into a range of smaller country towns and are heavily reliant on it. Some of our – King Island, for example, heavily reliant on it as well. So we are treating this very seriously and keep being very vigilant about what is actually happening, and keeping an eye on the situation hour by hour.

NATALIE BARR: Because, of course, we’ve got Aussie passengers who would have booked. We’ve got 2,000 employees. What form could that help take?

CATHERINE KING: Look, it’s hard to speculate at this stage. Obviously, Rex has been a – Rex is in a very different position to Bonza. It owns its aeroplanes; it doesn’t lease its planes. It has been in a strong position and it’s difficult to speculate exactly what’s going to happen tomorrow. But obviously the trading halt has caused some concerns to people, and it’s up to Rex to be informing its customers. It’s operating its services today. It’s continuing to operate those as well. There’s obviously been some instability in the board just recently that’s been reported. So we’re keeping an eye on it, but I do want to assure people that Rex in particular is an important airline for Australia. It is one of the airlines that – or one of the few airlines that flies into the regions. And we’re watching this situation very carefully.

NATALIE BARR: Does it sound like they’ve tried to take on the big airline giants in the cities too soon?

CATHERINE KING: Well, look, certainly they have been flying on the Melbourne – the Golden Triangle we call it, the Melbourne–Sydney–Brisbane routes. They’ve also opened up a route to Perth as well, and that’s good because we want that competition to be there. But also, you know, aviation is an incredibly tough business. It is hard to make money. You’ve seen now across the world, airlines go under all the time. And we want to make sure that we’ve got a strong aviation sector here in Australia. It’s why we’ve been doing substantial work on slots reform in Sydney while we’ve been doing an aviation white paper. This obviously is something that’s very concerning to the government, but we want to make sure we keep those jobs in Australia and we keep regional Australians connected.

NATALIE BARR: So if we lose Rex, what does that say for prices in the industry?

CATHERINE KING: Well, the first thing, let’s not speculate about that yet. We just genuinely don’t know. And obviously they’ve put themselves in a trading halt – that happens from time to time. We’ll see tomorrow what they – what they’re intending to do going forward, so it’s too soon to speculate, I think, on that. But obviously we want to see competition on our domestic market, but what we also want to do is make sure we’ve got strong Australian airlines. It’s really important – it’s important to our sovereign capability, and making sure that we’ve got regional carriers is equally as important as well.

When we saw Bonza go under, obviously they had three to four leased planes. They were operating in a sort of smaller market. Virgin and Qantas and Jetstar stepped up very quickly to assist passengers immediately. We don’t want to have to see that circumstance occur. We want to see Rex continue and we want to see regional aviation continue. And obviously, if the government has a role to play in that, we’ll play that role.

NATALIE BARR: Transport Minister Catherine King, thank you.

CATHERINE KING: Good to be with you.