Australia’s largest independent regional airline, Regional Express (Rex) has called on the government to stop insisting that Qantas remains on regional routes if they are not commercially viable for Qantas.
Rex Managing Director, Geoff Breust said: “The fact of the matter is that Qantas has an intrinsic cost structure which makes some of its thinner regional routes commercially unsustainable. It will be in everyone’s best interests for Qantas to be allowed to exit such routes to allow a more efficient operator to step in to provide a better schedule at more affordable fares.
“Rex has recently leased another 25 Saab aircraft and we have the resources and the willingness to fill the void should Qantas withdraw from any of its regional ports,” Mr Breust said.
Past experience has proven that Rex can provide reliable and more frequent services at much lower fares to ports from which Qantas once operated.
“Recently Rex started new services to Grafton and Taree within three months of the collapse of the previous operator. These were routes which Qantas once operated. Last year when Qantas withdrew from routes in South Australia and Tasmania which it said were not profitable, Rex was able to provide the communities with a schedule which it has never experienced before – nine and more return services a day in the case of Port Lincoln and five to six return services per day in the case of Burnie - at fares lower than even before the fuel crisis.
“It is counter productive to insist on Qantas remaining on a route it does not find viable. This will result in a situation where the schedule will be totally unsuitable and the fares will be astronomical. Even so competition on such routes would be unlikely as the low level of traffic would not be sufficient to entice other operators to take on Qantas. In the end everyone loses out – the community, Qantas and other potential operators.
“We agree completely with the Minister for Transport and Regional Services, Mark Vaile’s comments that having Qantas subject to competition on regional services is necessary. We should let the market decide which are the viable routes and which operators serve them.”
“At the end of the day it is the service to the community that is important, not the carrier that provides it. If an operator other than Qantas can do the job properly and viably, then there is no sense in forcing Qantas to do it unprofitably and badly.
Rex operates 31 Saab 340 regional turboprop aircraft to 33 regional destinations from Sydney, Melbourne and Adelaide. It recently announced the acquisition of 25 latest generation Saab 340 B Plus aircraft over the next three years. Regional Express Holdings Limited listed on the ASX in November 2005 and the Rex Group comprises regional airlines Regional Express and Dubbo-based Air Link. Air freight and charter operator Pel-Air is a subsidiary.
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