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."
David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
Virgin Australia - Velocity Frequent Flyer
28 May 2011
Total posts 81
Wouldn't it be great if REX came under the Virgin banner?
15 Apr 2011
Total posts 580
And their fleet really isn't the most fuel efficient... It's a matter of just not planning for the future, being a bit unlucky with the competition, a changing regional industry (ie impacts of urbanisation) and market conditions...
Hi Guest, join in the discussion on Rex looks to axe regional routes from Sydney, Melbourne