Massive airfare spike after airline collapse

Airfares have spiked by up to 95 per cent since Regional Express (Rex) fell into administration earlier this year, Australia’s consumer rights watchdog says.

The airline entered voluntary administration in July, shedding more than 600 jobs and casting serious doubt on its ability to keep regional Australia connected to the nation’s major cities.

A report by the Australian Competition and Consumer Commission (ACCC) released on Tuesday found the collapse has hit the wallets of Australians, who have been forking out more in the absence of lower cost carriers.

“The withdrawal of Rex from major city routes has meant passengers no longer have the lower cost options it provided,” the ACCC said.

The report found “an increase in best discount economy airfares from July 2024 to October 2024 across many major city routes Rex exited on 31 July 2024”.

The biggest spikes involved flights to Melbourne, with trips from Adelaide to Melbourne soaring by 95 per cent.

Melbourne to Gold Coast also jumped 70 per cent, while Canberra to Melbourne jumped 54 per cent.

The price of tickets for other less travelled routes also skyrocketed, with Canberra to Gold Coast jumping 171 per cent and Brisbane to Hamilton Island up 122 per cent.

“The increase coincides with less competition after Rex’s exit from many of these routes, an increase in seasonal demand during September and fuller flights,” the ACCC said.

The report came as the Albanese government announced it was throwing Rex an $80m lifeline after the debt-ridden carrier fell into administration earlier this year.

Infrastructure and Transport Minister Catherine King and Workplace Relations Minister Murray Watt said on Tuesday the financing would “support the business to continue offering critical services for regional communities”.

They said employees let go during the voluntary administration would get “early access” to the Fair Entitlements Guarantee, which offers Commonwealth-backed redundancy pay in dire situations.

“In addition, Rex’s administrators and main secured creditor PAG have advised they will pay the entitlements of former employees of the regional business who have been made redundant during the Voluntary Administration period,” the federal ministers said.

With Rex’s administrators hoping to extend the administration period until June 30, 2025, the government has committed to continuing “to guarantee ticket sales made throughout the voluntary administration” until the end of the extension.

“The guarantee has been effective so far, and has yet to be used with flight bookings holding up well,” Ms King and Mr Watt said.

“Today’s announcement is another demonstration of our commitment to maintaining regional aviation access, recognising the important role that Rex plays in regional communities right across Australia,” they said.