Flights cancelled as major airline collapses

Flights have been cancelled as regional airline Rex collapses, following a trading halt on Monday.

The airline, under Regional Express Holdings Limited, has gone into voluntary administration.

The airline’s domestic fleet of Boeing 737 services has been grounded in the collapse, while flights between major airports have been cancelled.

But flights between regional locations are unaffected.

Ernst & Young have been appointed as voluntary administrators, Samuel Freeman, Justin Walsh and Adam Nikitins are set to manage the administration.

Travellers with existing or cancelled flights have been given the chance to transfer their ticket to select Virgin Australia flights, and eligible customers will be “re-accommodated” on Virgin flights “as close as practicable to their original time of travel”.

“Rex and Virgin Australia are also exploring opportunities to support regional customers, which include Virgin Australia selling Rex’s regional services through codeshare or interline arrangements, and making Velocity Frequent Flyer benefits available to Rex’s regional customers,” an EY statement read.
“The administrators would like to thank Virgin Australia on behalf of impacted Rex customers and regional communities for its support during this difficult time.”

Regional Saab 340 flights are “currently unaffected” by the collapse.

“Prepaid ticket holders will continue to have their tickets honoured by the Rex Group on regional routes,” EY’s statement read.

Treasurer Jim Chalmers said the government was “prepared to play a constructive role” following the collapse, and assured workers they will try to “minimise job losses”.

“Overnight the company contacted its customers and said that the regional services will continue. If that’s the case, then I think that would be a big relief for a lot of Rex customers,” he said.

“I wanted to say to the hundreds of Rex workers who would be really worried this week that the (transport minister) Catherine King has been speaking with the other airlines to make sure that where it’s possible we get people redeployed so that we can try to minimise these job losses and focus on the regional services, which we know are so crucial to regional communities.

“We are obviously prepared to play a constructive role here, but we need to hear from the company and its administrators first. I don’t want to pre-empt the sorts of considerations that we might be making.”

Sydney Airport chief executive officer Scott Charlton said his thoughts were with travellers and employees who would be affected by the collapse.

“We are pleased to see that the Administrator will continue regional operations to and from Sydney during this period as these services are critical for many regional communities,” he said.

He added the collapse is evidence change is needed in the aviation market in order for “competition to thrive”, because “recent history suggests the barriers are too high”.

“We have a rare opportunity to get this right with the proposed slot reforms at Sydney Airport and through the imminent Aviation White Paper, and we remain ready to work with the government on implementing both,” he said.

The Australian Services Union assistant national secretary Emeline Gaske said the move has marked a “worrying time” for hundreds of workers, with the union set to work with administrators to “try to save as many jobs as possible” and ensure members entitlements are “protected”.

“It’s particularly concerning that Rex has been placed into administration so closely after the collapse of Bonza – another airline that provided services to regional locations,” she said.

“Regional air travel not only facilitates access to otherwise isolated communities, but regional airlines play an integral role in providing quality local employment opportunities.”

Ms Gaske called on the government to take steps prioritise regional air travel routes.

“Too many jobs are dependent upon a thriving airlines industry,” she said.

The collapse comes after widespread speculation the airline was going under, after bookings were suspended on some of its services and a trading halt was announced on Monday.

A Rex employee told The Australian airline crew had also been turned away from a company-designated hotel at Brisbane Airport over “unpaid bills”.

The Prime Minister said on Tuesday his government would look at “any proposals” to help Rex after it went into a trading halt on Monday, but took a shot at the carrier for running non-regional flights.

Speaking to reporters in Sydney, Anthony Albanese on Tuesday said Rex was an important airline which received “substantial government support with no conditions attached”.

“One of the things that I expressed concern about was that Rex moved away from their traditional role of being a regional airline into flights from Sydney to Melbourne,” Mr Albanese said.

“Rex as a regional airline provides important links with regional communities and particularly between capital cities and regional communities. It is important for those local economies.”

The prime minister’s comments came amid calls for his government to act as Rex’s future hangs in the balance, and just months after start-up airline Bonza went bust.