Regional Express Holdings Announces Significant Job Cuts

Australian airline Regional Express Holdings (Rex) has entered voluntary administration, eliminating hundreds of jobs. This decision marks Rex as the second small airline in Australia to enter administration this year, intensifying the concentration within the country’s aviation market.

Expansion and Challenges

Rex, traditionally known for servicing Australia’s regional areas, expanded in 2021 to include flights in the “golden triangle” between Sydney, Brisbane, and Melbourne.

Major carriers, such as Qantas Airways and Virgin Australia, dominate this area. Despite the expansion, Rex struggled to significantly impact the market, which was over 90% controlled by Qantas and Virgin Australia as of March, according to the competition regulator.

Administration and Job Cuts

The airline has appointed administrators from Ernst & Young, who announced the closure of the subsidiary operating Rex’s Boeing 737 flights between major cities.

This decision will result in 360 job redundancies, with an additional 250 positions cut elsewhere. However, Rex will continue its regional operations using its fleet of Saab 340 aircraft.

Government Response and Future Prospects

Transport Minister Catherine King stated that while the government had already provided some support to keep Rex’s regional flights operational, it is cautious about providing further financial assistance without ensuring a long-term solution for regional aviation security.

Market Dynamics and Industry Context

Rex has previously accused Qantas of “price gouging” on domestic routes and “pillaging” its regional pilots, allegations that Qantas has denied. This collapse follows the closure of budget airline Bonza three months earlier, whose fleet was repossessed by creditors.

The recent results highlight smaller airlines’ challenges in Australia’s highly competitive aviation market, where major players dominate the landscape.