As the world watched Virgin Australia grit its teeth and plunge into (voluntary) administration, it appears a small regional carrier was licking its chops.
What makes us say that? At a time of unprecedented uncertainty for the travel industry, REX (Regional Express Airlines) has announced a surprise plan to start flying capital city routes.
As the ABC reports, REX’s deputy chairman John Sharp even thinks “it could even grow to take Virgin Australia’s place in the event the sale of that carrier doesn’t succeed.”
Mr Sharp also told the ABC: “The proposition is to fly between them [capital cities] and provide a domestic air service in place of the ones once provided by Virgin.”
In other words, REX plans to launch direct commercial flights on high traffic routes, using jet airliners, in an effort to compete with Qantas, Virgin Australia and Jetstar.
REX intends to raise $200 million, in order to lease more aircraft and employ more staff to operate them.
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Interestingly, as reported by The Australian Financial Review, “The Morrison government handed more money [$67 million] to Regional Express Holdings through its pandemic support measures for the aviation sector than it did to Qantas and Virgin Australia combined.”
This is something Opposition transport spokeswoman Catherine King pointed out too.
The Australian Financial Review reports the Deputy Prime Minister Michael McCormack defended the allocation of funds, calling Catherine King’s suggestion priorities may have been influenced by REX’s deputy chairman John Sharp being a former Nationals MP, “partisan” and “regrettable.”
Catherine King also allegedly accused the government of being inconsistent in their ‘the best solution is a market solution’ approach, making the point that REX, like Virgin, is primarily owned by Singaporean interests.
Deputy PM Michael McCormack’s response? “Rex is receiving funding under the Regional Airline Network Support program, a program in which ten other regional airlines are also eligible for funding.”
He also pointed out both Qantas and Virgin received support from the government to operate crucial international and domestic services in the past few months.
More to come as the story develops.