In brief: Australia's largest independent regional airline Rex could close several routes from Sydney and Melbourne in response to increased fuel costs and decreasing passenger numbers.
The airline has earmarked Sydney-Taree, Sydney-Grafton, Sydney-Moruya, Sydney-Bathurst, Melbourne-Griffith, Melbourne-King Island and Melbourne-Merimbula services for potential closure.
In a statement issued today, Rex executive chairman Lim Kim Hai described the current operating environment as "extremely challenging", due to the combination of fuel prices being up 20 per cent over last year while passengers numbers fell by 2.8 per cent.
"The very high fuel price is making the situation quite untenable and all airlines are compelled to put in place rigorous measures to remain profitable," Lim said.
"The Rex board has carried out a review of its network and has identified a number of routes that may not be sustainable should the situation degrade further, especially in light of the federal government's decision to significantly reduce its contributions to regional air services throughout Australia from 1 July."