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Speaker 1: We know that Rex's seven three seven operations between major

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Speaker 1: cities have been canned after the airline was placed into

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Speaker 1: administration late yesterday, but regional services are going to continue to.

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Speaker 2: Operate for the time being.

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Speaker 1: The appointment of Ernst and Young as voluntary administrators came

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Speaker 1: after REX entered into that trading halt on Monday, and

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Speaker 1: its fueled speculation that the airline was about to go

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Speaker 1: under now. In a statement posted to the REX website,

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Speaker 1: Ernst and Young said regional flights operated by the belief

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Speaker 1: they called the SAB three forties were currently unaffected by

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Speaker 1: the administration and would continue to operate. They've said that

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Speaker 1: prepaid ticket holders are going to continue to have their

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Speaker 1: tickets honored by the REX group on regional Roots. Now

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Speaker 1: joining us on the line to talk a little bit

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Speaker 1: more about this situation more generally and what it means

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Speaker 1: for the aviation sector in regional Australia is aviation expert

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Speaker 1: Bruce Dale.

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Speaker 2: Good morning. I seem to have lost him for some reason.

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Speaker 2: He's dropped out.

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Speaker 1: We've lost Bruce from the phone line, so we are

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Speaker 1: just trying to get Bruce back.

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Speaker 2: On the line. But yeah, it's it.

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Speaker 1: Is an interesting scenario to put it mildly, and I

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Speaker 1: even though my understanding is that we don't have those

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Speaker 1: REX flights in and out of the Northern Territory, it's

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Speaker 1: no doubt that it's going to have an impact in

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Speaker 1: a lot of different ways in terms of that connectivity

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Speaker 1: right around Australia. I mean when you look at even

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Speaker 1: catching a flight from another regional part of Australia too,

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Speaker 1: let's say Capital City, and then you may continue that

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Speaker 1: journey then on that Rex flish But now with those

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Speaker 1: those Capital City journeys no longer able to.

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Speaker 2: Happen, it's going to have an impact.

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Speaker 1: And it follows on, of course, from the situation that

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Speaker 1: we've seen with Bonza just a little while ago. Now

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Speaker 1: joining us on the line, take two, it's it is

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Speaker 1: aviation expert Bruce Dale.

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Speaker 2: Good morning, Bruce.

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Speaker 3: Sorry about that takeoff there.

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Speaker 1: Oh that's okay, no worries at all. It could have

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Speaker 1: been our fault. I'm not sure. But well, first off, Bruce,

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Speaker 1: do you from what I can see, I did have

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Speaker 1: a look yesterday and I couldn't see any flights in

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Speaker 1: and out of the Northern Territory operated by Rex.

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Speaker 2: Do they currently operate in the nt.

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Speaker 3: Yes, you are correct there, Katie. The Northern Territory was

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Speaker 3: the last jurisdiction where REX did not fly, So in

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Speaker 3: this case, there aren't going to be any Territorians affected

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Speaker 3: by routes directly to and from the territory. But of

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Speaker 3: course if they are reliant in connections to family in

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Speaker 3: regional Queensland, New South Wales or many other states, they

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Speaker 3: may well be impacted by this news.

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Speaker 2: Well.

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Speaker 1: And this is the thing, even though they aren't here,

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Speaker 1: it is a real blow to connectivity right across Australia.

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Speaker 1: I know that they're saying they're going to honor those

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Speaker 1: regional flights at this point in time, but it is

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Speaker 1: a blow on top of the situation with Bonza.

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Speaker 3: Yes, it's a certain bleer blow for the eight hundred

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Speaker 3: and fifty inmployees who they are going to be losing

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Speaker 3: their jobs today, and of course those people who are stranded.

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Speaker 3: The good news does seem to be that they will

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Speaker 3: be flying the regional routes because about ten years ago

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Speaker 3: REX has actually acknowledged as one of the world's most

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Speaker 3: profitable airlines on a rate of return because of its

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Speaker 3: excellence in regional operations. So they're experienced operators and there's

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Speaker 3: no reason why they can't get back to that situation again.

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Speaker 3: The key routes, the regional roots, are such a key

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Speaker 3: part of aviation infrastructure for remote destinations, as we can

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Speaker 3: relate to in the territory. I'm sure there will be

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Speaker 3: a certainly concerted effort to ensure that our remote cousins

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Speaker 3: in the other states and territories are not going to

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Speaker 3: be isolated by bad news.

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Speaker 1: Now in terms of what this means more generally for

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Speaker 1: the aviation sector and connectivity, I think for Australians, particularly

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Speaker 1: those of us that live in more regional parts of Australia.

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Speaker 1: On top of what had happened with Bonza and now

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Speaker 1: with this situation with Rex, does it sort of indicate

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Speaker 1: that you know that flying those regional roots isn't as

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Speaker 1: profitable as you know, what we might hope.

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Speaker 3: Yes, I think in this case it's actually not the

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Speaker 3: regional roots which were the significant drag on Bonds's performance.

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Speaker 3: It's probably actually entering the highly competitive capital city routes.

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Speaker 3: They were flying Sydney to Melbourne, Melbourne to Brisbane, those

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Speaker 3: sort of golden triangle roots as they're called, and because

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Speaker 3: they lacked the frequency in the scale, they were finding

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Speaker 3: it difficult to compete with both Quantas and Virgin who

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Speaker 3: can have flights every fifteen minutes or half hour time.

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Speaker 3: So unless you have the grand recognition, I mean reck,

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Speaker 3: if you're a capital city person, it sounds like a

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Speaker 3: great name for a dog, why would I fly it?

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Speaker 3: But if you're in the regional areas where Rex is

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Speaker 3: the bread and butter in the airline, they certainly had

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Speaker 3: a lot of strength, a lot of loyalty, and they

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Speaker 3: were a very reliable airline and I'm sure sure that

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Speaker 3: they will continue flying on those regional statises.

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Speaker 2: Yeah, and look, let's hope that they do.

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Speaker 1: I mean in terms of you know, from a government perspective,

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Speaker 1: Australian and territory governments, do you think that more needs

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Speaker 1: to be done to try to keep some of these routes?

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Speaker 1: And I know that REX in Queensland and other parts

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Speaker 1: of Australia is it looks like those regional routes are

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Speaker 1: going to continue. But do you think that more does

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Speaker 1: need to be done to try to attract different airlines

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Speaker 1: to fly on some of those routes that you know

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Speaker 1: that maybe some of the other major airlines aren't as

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Speaker 1: keen to do.

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Speaker 3: Yeah, I think we've got two levels. I think some

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Speaker 3: of the ports that REX are swaying to, the major

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Speaker 3: airlines couldn't fly to because their aircraft were actually a

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Speaker 3: bit too large. So I've got that issue. And the

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Speaker 3: Australian government has both state and territories do actually take

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Speaker 3: a rather pragmatic approach to aviation regulation, like for example,

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Speaker 3: in Queensland we're on based at the moment, many of

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Speaker 3: rex's routes are actually protected by the government, so they

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Speaker 3: were granted exclude of use of those regional routes to

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Speaker 3: prevent competition coming in and actually destabilizing the very tenuous

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Speaker 3: regional operations over time. It's shown that if you have

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Speaker 3: passenger numbers of about seventy thousand per year, there's actually

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Speaker 3: a high chance that both operators will fail on the route.

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Speaker 3: So sometimes competition is good, there's also learning at times,

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Speaker 3: and competition actually might end up harming everybody, both the

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Speaker 3: airline operators and the community. You might find themselves without

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Speaker 3: any airline carriage.

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Speaker 1: Well, Bruce Dyle, aviation expert, always good to catch up

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Speaker 1: with you. Thanks so much for having a quick chat

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Speaker 1: with us this morning.

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Speaker 3: My pleasure and sorry about the lake.

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Speaker 2: Flight time. Oh good, thank you, thanks so much,