Interview with 2BS Bathurst

JANEEN HOSEMANS: Well, Rex Airlines has entered voluntary administration and stopped selling seats on major routes amid concerns about the future of the regional airline. EY has been appointed as administrators, with flights between major airports cancelled and the Rex Group’s domestic fleet of Boeing 737 aircraft grounded. Prime Minister Anthony Albanese said he will consider proposals to save the company, but noted that Rex already received substantial public funding with no conditions attached. It’s my pleasure to welcome to the programme Catherine King. She is the Federal Minister for Infrastructure, Transport, Regional Development and Local Government. Minister, good afternoon. 

CATHERINE KING: Thank you very much for having me on, and good afternoon to your listeners and to you as well. 

JANEEN HOSEMANS: Thank you for that. This is not great news for regional travellers. 

CATHERINE KING: No, look, it’s not. And obviously, with the trading halt that was put on Rex yesterday and then now the announcement today that they have taken the decision to go into voluntary administration, we’ve been speaking both to them and then to the administrators today as a government. I want to assure your listeners that we are very acutely aware of the importance of Rex to regional Australia and the importance of making sure that we have a continued service for our regions. You know, the good thing about what’s happened overnight is that we understand that the regional services are able to be continued, and important that people are aware of that. But any passengers who have booked on those city to city flights, they can rebook through Virgin at no cost. Jetstar and Qantas are now also offering that service, and I’ll give out a couple of numbers now. It’s important that people ring the number rather than just go to the airport and hope for the best. Virgin is 13 67 89, and Jetstar is 13 15 38, and Qantas of course 13 13 13, and they will help accommodate Rex passengers on those capital city routes that now obviously are not proceeding. 

We’ll now work with the administrators to see what we need to do to ensure the continuation of– it’s not just about regional services, they are important, but it’s also– there’s obviously quite a few jobs that are attached here in communities across our regions as well, in some of the subsidiaries, through maintenance and things like that. We’ll make our way through all of that and have more to say once we’ve got a better handle on what’s actually happening. 

But be in no doubt, we know how important Rex is to regional Australia and we’ll do what we can. Of course, it’s not a blank cheque. We want to see improvements in aviation overall. And we’ll have some things to do and to work through, that will take us a little bit of time. We want to do it expeditiously, but also properly. 

JANEEN HOSEMANS: Minister, could I ask you, Prime Minister Anthony Albanese has said, as I mentioned in my introduction, he will consider proposals to save the company. How appropriate is this? What sort of precedent does it set? Because there have been bailouts for airlines by the Federal Government before. Is this something that taxpayers should be expected they just have to continue doing? 

CATHERINE KING: I think in terms of Rex in particular and regional connectivity, I think this is an important, frankly, public good. It needs to happen. We need to make sure there is that– you know, in many instances in communities, Rex is the only airline that is flying in and providing that connectivity to medical appointments. But also making sure that people can participate, your economies can grow and that people can visit and see family. However, I don’t think it should be seen that the government is interested in just a blank cheque. 

I think we’ve been highly critical of the previous government just throwing money at airlines without conditions attached, without potentially looking at, what does that mean in terms of making sure that there is guarantees of service, all those sorts of things? So we will examine all of that in the coming weeks with the administrator once we’ve got a handle of what their ask of Government is. But I think it’s fair to say just throwing money at the problem is not going to solve it. We want to see improved services, improved customer experiences. We want to have a say about the future of regional aviation as well in that process.  

JANEEN HOSEMANS: As part of those discussions, could we potentially see another player actually take over the Rex fleet and those routes? 

CATHERINE KING: Certainly it’s early to say– too early to say yet, and that will be a matter for the administrators. I know that Virgin has obviously stepped up in particular and have an agreement with Rex in relation to some planes and passengers. We’ve also seen both Rex and Qantas and Jetstar say they’re very keen to talk to any staff that may be made redundant through this process. There is a shortage of people in aviation at the moment, so– and these are good and important jobs. So I think both Virgin and Qantas have said that they will help and try and accommodate where they can. But I think it’s early days yet to see whether there’ll be another player, whether there’ll be other private equity, what that looks like. And that’s really the administrator, who was only appointed overnight, and they’ll need to take some time to actually get a handle on all of the facets of the business, and it is a complex one. 

JANEEN HOSEMANS: Rex have posted substantial losses over the last 12, 18 months. Moving forward, how appropriate is it for the Federal Government to be involved in the pecuniary aspects of another regional airline? 

CATHERINE KING: Well, I think from our point of view, it really is about what is– the important thing that is here is that continued regional connectivity. Making sure that people who live in the regions, particularly where this is the only airline who might be– have a presence, that that connectivity continues. And that’s really in all of our interests that we have that, important that you have that ability for people to be able to continue to have that access to service. 

In terms of more broadly, and it won’t be the first time that– we’ve talked about– once before, we’ve talked about having an equity stake in Qantas when they were in trouble last time. We said instead of the previous government doing what they did, that they should look to take equity stakes in other airlines as well. And obviously to help them through, but also to make sure there is that competition, that there is proper governance, and all of those things in place as well. So we’ll have a look at that. Everything– we’re not ruling anything off the table or anything on the table yet. We’ll have a really good look at it. But the primary purpose is that we want to make sure those services continue for people.  

JANEEN HOSEMANS: Minister I know it’s a very busy day for you, and I thank you most sincerely for taking time to chat with us today. 

CATHERINE KING: Always very happy to talk to you. 

JANEEN HOSEMANS: Thank you. Minister Catherine King there, the Minister for Infrastructure, Transport, Regional Development and Local Government.