Rex Airlines Bankrupt: Entire Cities and Towns Could Be Shut Down: The One Major Decision That Did Rex and the Perfect Storm of Challenges That Could Stop Flights to Your City

The demise of Rex Airlines has raised fears that cities in the region are being cut off from the rest of Australia. Aviation experts blame the company’s demise on its decision to compete with Qantas and Virgin on routes between major cities.

Regional Express Holdings Limited went into voluntary bankruptcy late on Tuesday night, with 610 of its 2,000 employees facing redundancy.

Domestic flights between capital cities have been cancelled and competitor Virgin Australia is offering affected customers the opportunity to transfer for free.

Regional flights, often described as the lifeblood of rural Australia, are still operating for now.

“Regional flights are not affected by the government and continue to operate as normal,” a Rex spokesperson said.

But the assurance has failed to calm fears among communities in the region, who rely on the airline for everything from hospital visits and mail to groceries.

Residents of the small town of Birdsville in the Queensland outback, on the edge of the Simpson Desert about 1,500km from Brisbane and with just 100 inhabitants, fear being cut off from the rest of the world.

Regional Express Holdings Limited went into voluntary receivership late on Tuesday night, with 610 of its 2,000 employees facing redundancy

Domestic flights between capital cities have been cancelled, but regional flights, often described as the lifeblood of rural Australia, are still operating for now (pictured: map of Rex Airlines routes, including those now cancelled)

They rely on Rex Airlines’ services twice a week to receive mail and groceries, travel to larger medical centers, or fly their children to boarding school in the city.

Mayor Francis Murray, who grew up in Birdsville and was once one of its boarding school students, is keeping a close eye on the future of the embattled airline.

“The knock-on effect it would have on these small communities (if the Rex flights stopped) would be comparable to having an internet connection in Brisbane,” Murray said.

“It would affect everyone every day.”

The ‘Milk Run’ flights from Birdsville, which are funded by the Queensland Government, also serve other towns in the region including Charleville, Bedourie and Mount Isa.

Locals in the small Queensland town of Birdsville (pictured), which is located on the edge of the Simpson Desert, about 1,500km from Brisbane and has a population of just 100, fear being cut off from the rest of the world.

The federal government said it would work with administrators to ensure the continuity of regional aviation.

However, many fear for Rex’s future, especially after the demise of regional operator Bonza in April.

“Supporting regional aviation should be a national priority, one that provides equal opportunities to be connected no matter where you live,” said Kylie King, Chair of Regional Capitals Australia and Mayor of Albury.

Rex’s troubles come at a critical time, as rural populations grow and prepare for large-scale energy projects.

Flinders Shire, in north-west Queensland, is ready to welcome workers for the construction of the 840km CopperString transmission line.

“The saying ‘build it and they will come’ is true: We build the infrastructure and the workers will come,” said Mayor Kate Peddle.

‘But now we are faced with the harsh reality that there may no longer be planes to bring them here.

“I am pleased that Rex Airlines has confirmed that we will continue our regional flights, but you have to ask yourself: for how long?”

Concerns about Rex’s future also arise as residents in the region face declining essential services such as banking and health care.

According to Susi Tegen, director of the National Rural Health Alliance, the regions cannot afford to lose aviation as well.

“Rural, remote and regional Australia generates two-thirds of Australia’s export revenue and provides 90 per cent of the food Australians eat,” Ms Tegen said.

“But we are not providing the infrastructure and economic resources that allow rural communities to continue to thrive.”

With flooding blocking major roads in outback Queensland, the Rex service was vital in getting goods to the Simpson Desert Oasis roadhouse.

“We’ve been experiencing flooding here for months,” said operator Robbie Dare.

Aviation experts have argued that Rex’s problems stemmed from its decision to fight for passengers in the capital on major city routes

‘The average citizen does not realize how much we suffer here in these rainy times.’

Shaun Radnedge, mayor of Murweh Shire in south-west Queensland, said the council had partnered with Rex to fly in key workers not based in Charleville, as well as tourists, mail and supplies.

“In terms of our rural communities, this aviation contract to bring people into the communities is our lifeblood,” Mr Radnedge told The Australian.

“It not only provides us with opportunities for work, but also for medical transport and things like that. It’s an essential service.”

Mr Radnedge said he was very concerned about the future of towns like Charleville if Rex ceased to exist.

His fears are shared by residents of the Western Australian town of Carnarvon, 900km north of Perth.

Merome Beard, who represents the North West Central constituency for the Liberal Party in the Western Australian parliament, told the newspaper that Rex’s fall would be “catastrophic”.

“We need the government to have a plan to ensure continuity of service,” Ms Beard told the newspaper.

‘There is currently a lot of unrest in the community and people are looking for certainty about future services.’

Transport Minister Catherine King said her department was in discussions with executives about supporting Rex.

“Rex is an important airline for regional and remote communities and its continued existence is in the best interests of the region’s residents, the travelling public, its employees and the aviation industry,” King said.

Aviation experts say Rex’s problems stem from its decision to focus on passengers in the capital on major city routes.

The airline wanted to compete with Qantas and Virgin in the so-called ‘golden triangle’ of flights between Sydney, Melbourne and Brisbane.

Rob Nicholls, associate professor and policy expert at the University of Sydney, said SBS News The challenge Rex created for itself was that it had to compete directly with Qantas and Virgin on urban routes, whereas it was originally set up to fly regionally only.

“You have one major airline and one competing airline that is strong and has sufficient financial resources, and then it is difficult for a third player to compete directly if there are only a limited number of people who want to fly between places,” he said.

According to Professor Nicholls, Rex found it more difficult to be flexible on pricing in the new market.

“Rex had a challenge because he was the new entrant on those routes and because the costs were high,” he explained.

“We’ve already seen Bonza. The biggest problem was that the cost of leasing aircraft was very high, while it’s exactly the same aircraft or type of aircraft that Rex has leased for those major city routes.”