Interview on ABC Radio Melbourne Mornings with Rafael Epstein

RAFAEL EPSTEIN: Catherine King is the Infrastructure Minister in Anthony Albanese’s Federal Government, she has responsibility for airlines. Good morning. Is the Government going to have to bail Rex out?

CATHERINE KING: Well, we’ll work our way through with the administrator any support that they are seeking. The administrator has indicated to my department that they will be seeking some support. We’ll consider those requests in detail and what the nature of those are. We are very serious about making sure that regional aviation continues. We are – no doubt, we know how important this is to many regional communities, but we want to work and take our time to work our way through what those requests might be. 

In the immediate short term, we were asked to try and assist in making sure that the regional Rex could continue to fly into our major airports. Obviously, there are airport fees that are associated with airlines flying, so I contacted all of those last night and also making sure that they’ve got fuel, supplies and all of the supply chain is okay. So we acted yesterday to do that, and also have spoken obviously to both Virgin and Qantas around workforce and continuation of passengers. So that’s immediate short term, but in the longer term we’ll work our way through now that they’ve gone into administration.

RAFAEL EPSTEIN: So just to make sure I know what I’m hearing, you’re looking after the fees at the airports and the immediate fuel costs, and you are still open to something beyond that. Is that what you’re saying?

CATHERINE KING: No, we’re not looking after the fees of the airports. The airports are doing that. I’ve contacted them to ensure that they could continue to still have access so that access is still there. There may be requests around some of those things going forward, but we will ensure the administrator is looking after those at the moment. But there may be requests around some of those things, but that is – it’s the first day we’ll work our way through that. 

We will need some time to, obviously, as a government to consider what those requests are. I think we don’t – what we don’t want to do is make the mistakes of the previous government, frankly, of throwing millions of dollars without government having a bit of a say about what happens in this sector and being involved. So we’ll look at what that is, what the asks are and what the nature are, but we also want to make sure that we have a stronger aviation sector coming out of this. And that’s really important to not just government but to the travelling public.

RAFAEL EPSTEIN: Do you think Rex can survive?

CATHERINE KING: Yes, look, I do. I think that there is a really important role that they play for regional Australia, and I think it’s in everyone’s interests, including the big airlines, that they do survive. I think this is a really important part of the way in which our country operates. I do think it’s in the best interests of everybody, including regional Australians, that they do continue to travel into our regions and supply those routes.

RAFAEL EPSTEIN: So it sounds like you’re open to sort of helping out the airline financially, subject to some change in what the Federal Government can and can’t do. Is the Government interested in Rex flying between Melbourne, Sydney and Brisbane? Is that something that you think needs to be maintained?

CATHERINE KING: Well, look, I think they’ve taken the decision and they’re commercial decisions that they’ve taken to enter into that market, they’ve now suspended or they’re now saying they’re not going to continue with that market, and that will be a matter for Rex. 

Obviously, we do like to see competition on those routes. But let’s be blunt, aviation is incredibly challenging. It’s not just challenging in this country. It’s an industry that has a lot of costs in it. It’s an expensive thing to run. We see – Australia is not the only country that sees airlines go under. Unfortunately, it is a really difficult industry with a lot of costs in it. Despite we see some of the profits, it hasn’t got a lot of money in it. And it’s capital; it’s very, very capital-intensive. And so it is hard and we’ve got a really small market. We’ve got a small market, despite the fact that we punch above our weight all the time in lots of things. It is a really small market and those lucrative routes between Brisbane, Melbourne and Sydney, there’s a lot of players in that space as well. 

We’d like to see more, but we really need to make sure that we get Rex through this. And really our effort is on making sure we’ve got regional services and regional connectivity. That was their core business, that’s what we want to make sure happens.

RAFAEL EPSTEIN: On 774. You can hear the Infrastructure Minister, Catherine King. Minister, do you – I guess the claim is that you haven’t done enough to open up Sydney Airport for Rex, but you seem to be saying you don’t think Rex really has a place flying in and out of Melbourne, Sydney, Brisbane, connecting the big cities. Is it that Rex can’t really make money in that market, or is it that the Government hasn’t forced the airports to open up and give Rex a real chance?

CATHERINE KING: Well, I see the Opposition out there yesterday again, and they’re being incredibly unhelpful, making all sorts of commentary when they know very little about what’s actually been happening. I think it’s unhelpful and unconstructive. It’s not unexpected, frankly. This Government has done more in slots reform. We basically had a decade where very little was done in aviation. We had millions and millions of taxpayer dollars thrown at airlines without any reform of the industry at all. We saw thousands of workers sacked. We saw, you know, Dnata workers denied JobKeeper. Like, really [inaudible]…

RAFAEL EPSTEIN: [Talks over] Sure, but I asked you – I asked you if you need to do more – 

CATHERINE KING: [Talks over] … and so – and so, about to – yeah, so – 

RAFAEL EPSTEIN: [Talks over] Add more airports or not. Have you done enough?

CATHERINE KING: [Talks over] Yeah, so – yeah, we announced really significant slot reforms. Slots have not been reformed for over 27 years. So this government is the government that is reforming slots at Sydney Airport.

It is a complex piece of work, so we’re working our way through that. And I certainly welcome the Opposition backing that in and giving an indication that they’re actually going to help passage of any legislation we bring through, when we bring that through, through the Parliament quickly. 

You know, it’s one thing to go, “oh, you need to do more”. Well, you know, when you’re asked to actually help, when you’re asked to actually do something constructive, it’s about time the Opposition did that. And frankly, they’ve played a wrecking role. 

As we get closer to the election, I think we’re going to see even more and more of that sort of chaos deliberately created. So, on them, frankly. But I’m not going to cop that from them. We’ve done more in 27 years to reform this. We’ve got an Aviation White Paper. Obviously, we just need to relook at the settings of that given what’s happened.

RAFAEL EPSTEIN: [Interrupts] Sure. Sorry, Minister, can I, just bring you back to people who might choose to sort of fly Rex between Melbourne and Sydney, or would like the idea of that.

CATHERINE KING: Yeah.

RAFAEL EPSTEIN: I can hear what you think about the Opposition. Do you think the airports have got too much power? Are they gouging? Are the airports gouging the airlines and therefore passengers? Are the airports stopping me flying cheaper, flying Rex between Melbourne and Sydney?

CATHERINE KING: I think you’ll see that both – you know, airlines and airports have a pretty –  there’s a competitive tension between them. If you talk to the airlines, they’ll say the airports are charging too much to access what is – you know, you can only fly into the airport and they say they’ve got a monopoly. And you’ll hear the airports say, well, the airlines are too difficult, they’ve got too much power. So I think there’s truth in between both of those. You can hear them. They will both say – you know, blame each other in terms of this space. 

I think that that competitive tension is okay. But I think there is also, you know, room to start discussing the fee setting or whether we need to look at that. And again, we’ve looked at some of those questions through the Aviation White Paper. And we’ll continue to sort of work through [indistinct] issues.

RAFAEL EPSTEIN: [Interrupts] So you do want the airports to loosen up a bit?

CATHERINE KING: Airports need to help in terms of this as well as airlines, you know. But again, this is a really challenging and expensive industry. It is expensive to run. It is a very capital intensive, very people intensive, as it should be because it’s important we have safe airlines and passengers have good experiences. 

And obviously we think that it’s not been working as best it could in that way, which is again, what started the Aviation White Paper. But I think there’s – everyone in the industry can pull their weight. I’m pleased in circumstances like this, we’ve seen the airports come to the party, we’ve seen the supply chain come to the party, and we’ve seen both Virgin and Qantas are also offering some assistance to passengers and to workers as well. We’ve seen that happen as well today, and I think that’s a good thing when the industry is in a challenging time like this, that people want to get in and help.

RAFAEL EPSTEIN: One more thing. A lot of us would like to take a train to Melbourne Airport. The airport itself now is happy with an above ground station. Clearly, your government’s going to have to come up with more money. The State Government’s going to have to come up with more money to pay for airport rail. Is there more money from the Federal Government for airport rail?

CATHERINE KING: Well, we’ll have to take that through our budget processes if that’s the case. Obviously there’s still issues around the airport and compensation that have to be worked through as well. So that’s still happening. But what we’ve said as a result of the independent mediator I bought in to have a look at whether there was a pathway forward, is that we do three things. You know, one of those has now been taken off the table, which is good. The airport’s saying it will concede that it can be above ground now. That’s significant movement and that’s great. We will do the work at Sunshine Station, making that a hub. There’s money required for that. So we’re working with the Victorian Government on that. And obviously we also want to do redo the modelling on Tullamarine. And we’ll have more to say about airport rail either in the budget next year or during the election.

RAFAEL EPSTEIN: More to say, more for us to ask you another time. Thanks so much for joining us.

CATHERINE KING: Always. I want to catch that train as well.

RAFAEL EPSTEIN: Catherine King there, the Infrastructure Minister.