Qantas' Regional Competitor, Rex, Says 'Aviation In Crisis' As Profits Halve

Regional Express has seen its profit slashed. Photo: supplied

Qantas isn’t the only one calling on the Abbott government to act in the troubled aviation sector.

Garry Filmer, chief operating officer of independent regional carrier Regional Express (Rex) wants the government to honour its election commitments, including a $3.5 million rebate for low volume regional routes to small communities, warning that “the irreversible collapse of regional aviation” loomed.

“The Abbott government needs to take immediate steps to fulfil their election promises to regional aviation outlined in the Coalition’s policy for aviation,” Mr Filmer said.

The call comes as Rex announced its Profit Before Tax (PBT) for the first half of this financial year dropped nearly 60% on the $12.5 million of the previous year to $5 million.

Foreshadowing the deterioration in the bottom line three weeks ago, Mr Filmer said while they’d been a decline in leisure and discretionary travel, the business market had “plummeted”.

“The entire aviation industry is financially haemorrhaging right now and approaching collapse,” he said, pointing to the recent failure of two other regional carriers, Aeropelican and Brindabella, saying more were likely to follow suit.

“The Abbott Government to date has not made any significant inroads to reversing the devastation inflicted to the economy by the previous government. For many parts of regional Australia, this would spell the end of regular air services forever and it would be ironic if it were the Nationals that presided over this outcome,” he said.

Rex’s passenger numbers dropped 27,000 to 548,000, year on year, while passenger revenue fell $4.2 million to $107 million and overall revenue was down $7 million to $130.1M.

Fuel costs rose $700,000 to $19.7 million.

Meanwhile, Rex deputy chairman and former transport minister John Sharp took a swipe at Qantas for its poor performance, telling the ABC that issues such as on-time departure and flight cancellations make a difference

“You can lean on your iconic status in the community if you wish, but the real things that will make a difference for Qantas will be to improve things like this,” he said.

“There’s a lot of things that Qantas could do for itself to solve its problems rather than just going to the government and saying please guarantee our debt.”

He added that if the government did give Qantas the guarantee, it would be a “disaster” for Rex, claiming the rival airline would use it to drive Rex out of business.

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