Public ownership is on the table: A Rex Saab 340, which operates out of Merimbula, Moruya and Cooma. Photo: Paul Stewart, YouTube.
The Federal Government may get back into the aviation business to ensure regional services are maintained, saying it will buy beleaguered airline Rex if a private buyer can’t be found.
Rex went into administration last July, and the federal government now has a big say in that process after taking on $50 million of its debt to its top creditor.
The government also provided a loan of up to $80 million to keep Rex’s regional routes operating until 30 June 2025
A buyer for the airline is being sought through a second competitive sale process starting this month, but the government says it won’t let regional services crash and burn if that fails.
The government said it was committed to maintaining these services for regional and remote communities and recognised the critical role of the Rex network to local economies.
Speaking at Merimbula Airport where he announced $12 million to upgrade regional airports, Prime Minister Anthony Albanese said regional Australians deserved access to quality and crucial regional aviation services.
“We are working collaboratively with the administrators of Rex to ensure that regional services continue beyond June 2025, including looking at what support the Commonwealth can provide, he said.
“Regional Australians can be assured that our government will continue to fight to ensure these regional services remain available.”
Mr Albanese said the government would prefer a private sale and would work with shortlisted bidders on any support that may be needed to increase the chance of a successful sale.
This would depend on commitments by bidders to provide an ongoing, reasonable level of service to regional and remote communities, the need to provide value for money to taxpayers and good governance, he said.
The government has also waived the “use it or lose it” test for Rex regional flight slots at Sydney Airport, which will ensure its access to those slots until 24 October 2026.
Transport Minister Catherine King said regional communities should not be shortchanged.
“When markets fail or struggle to deliver for regional communities, the government has a role to ensure people do not miss out on opportunities, education and critical connections,” she said.
“We are recognising that today and stepping in to keep these routes in the air.”
Bega Valley Shire Council Mayor Russell Fitzpatrick, Regional Development Minister and Member for Eden Monaro Kristy McBain, Member for Gilmore Fiona Phillips, Prime Minister Anthony Albanese and Transport Minister Catherine King at Merimbula Airport. Photo: Supplied.
Ms King said it was absolutely critical for regional communities that Rex continued to operate and continued to provide those services.
“We know they are flying 41 different routes every single week, and on 22 of those, they are the only airline that is available to communities to get to medical appointments, to get businesses working, to get people in and out for tourism.”
However, not everybody thinks the government’s purchase of Rex is a good idea or a viable proposition, especially given its ageing fleet.
Neil Hansford from Strategic Aviation Solutions told the ABC last month that nobody wanted to buy Rex because the fleet was more than 30 years old and would have to be replaced.
Mr Hansford believed nationalisation would set a bad precedent.
“If Qantas got into a similar situation, would they [the government] go and find $4 or $5 billion to take on Qantas?”
Mr Hansford believed the coming election was forcing the government to back Rex.
Aviation analyst Peter Harbison also said the government was keen to bolster the regional vote and the country’s main independent regional operator was important to regional centres.
Mr Harbinson said the government buying Rex would set a wrong precedent, but he believed if it did happen, public ownership would only be temporary.
The regional airport upgrades will include runway resurfacing, fencing, lighting and drainage, which will improve safety, enhance accessibility and boost capacity.
Merimbula will receive more than $3.7 million to extend the runway to 1800 metres, which will enable larger narrow-body airliners to land, as well as military and firefighting aircraft, and provide potential future growth to the region.
To the north at Moruya, its airport will receive more than $200,000 to reseal the runway, taxiways and apron pavement, and upgrade the apron lighting.
Member for Eden-Monaro Kristy McBain said Merimbula Airport was a critical access point for the community and emergency services during disasters.
“This upgrade will support larger aerial firefighting tanker aircraft to land when we need them most, make it easier for larger military transport to operate out of the airport, and also increase the safety for in-flight emergency recoveries,” she said.
“The extended runway will also ensure Merimbula Airport continues to attract aircraft that support our local businesses and visitor economy – while keeping people connected to work, health services and family.”
Member for Gilmore Fiona Phillips said she was delighted to see improvements at Moruya Airport. She described it as a lifeline for the economy, cutting commuting times for local people and helping to transport local produce to national and international markets.
“Not only that, but many people rely on air services for healthcare, emergency services and to stay connected with family,” she said.
“This investment will create more jobs, help local farmers, and support our social and economic connections across Australia. It’s great news for our regions.”
Elsewhere in NSW, Albury City Council will receive $5 million to deliver a full runway overlay to improve safety and strengthen the surface for larger aircraft to land. The government says this upgrade will support visitor levels and emergency services, particularly during bushfire season.
The Griffith City Council will receive nearly $500,000 to replace the ageing runway lights at Griffith Regional Airport. These lights are considered critical for safety and ongoing operations, especially for the Royal Flying Doctor Service (RFDS) and NSW Air Ambulance aircraft.
Other projects have been flagged for Mudgee and Moree.
Original Article published by Ian Bushnell on Riotact.
