Councils says they won’t be extorted by REX airlines who are threatening to leave South Australia
A $165m Federal Government attempt to keep Qantas and Virgin in the air has been announced as an extraordinary stoush breaks out between councils and Regional Express.
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Domestic flights from Adelaide to Sydney, Melbourne and key regional hubs across Australia will be underwritten by the Federal Government in a $165 million attempt to keep the two major airlines operating.
The deal with Qantas and Virgin follows weeks of bailout negotiations with Transport Minister Michael McCormack.
But the new deal will lose some shine locally this morning with a stoush erupting between regional South Australian councils, who operate a number of airports, and Rex Express Airlines (REX).
Travel restrictions have almost brought capital city routes to a halt, while flights to regional South Australia were slashed by more than half.
“We are ensuring secure and affordable access for passengers who need to travel, including our essential workers such as frontline medical personnel and defence personnel, as well as supporting the movement of essential freight such as critical medicine and personal protective equipment,” Mr McCormack said last night.
Under the deal spanning the next eight weeks, the Government will underwrite:
SEVEN Qantas flights from Adelaide to Melbourne
SEVEN Qantas flights from Adelaide to Sydney
TWO return Qantas flights from Adelaide to Kingscote, Port Lincoln and Whyalla
THREE Virgin flights from Adelaide to Melbourne
The flights will help freight demands, and provide some relief to thousands of stranded passengers.
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But the deal, that will be officially unveiled today, will coincide with a looming public stoush between REX and local councils.
Local Government Association President Sam Telfer said: “Councils would not be extorted by Regional Express (REX), that has threatened to drastically reduce or cease services to regional airports that don’t enter into long term agreements by today to significantly bolster REX’s bottom line.”
In an open letter to councils REX airlines said they “will avoid working with greedy councils that want to extort as much money as possible from airport fees and charges so that it can finance its own bloated administration or other hidden agenda of local councillors.”
“We expect you to convene an extraordinary council meeting to consider and approve the agreement by 17 April 2020.
“All Rex air services will be permanently ceased after that date in the absence of an agreement.”
Mr Telfer said regional councils had been given only days to commit to Rex’s demands for an eight-year agreement because of COVID-19.
“Councils appreciate the importance of regional air services, and are willing to partner with the State and Federal governments on providing support for companies flying regional routes,” Mayor Telfer said.
“However, we won’t be strongarmed into signing away millions of dollars at a time when our sector is working hard to support communities impacted by COVID-19.”
“In the midst of this health crisis is not the time to be forcing councils and their communities to be committing to such long-term agreements.”
South Australian Senator Rex Patrick, a long time campaigner for better regional air access, last night sided with councils.
“I don’t know what REX management is thinking, but their tactic will cause huge reputational damage to the company,” Senator Patrick said.
“I totally understand the need for REX to enter into arrangements with governments, airport operators and customers to deal with the COVID-19 crisis, but trying to force an agreement stretching eight years beyond the crisis is totally unreasonable and unconscionable.
“No-one, including REX management, can predict what will happen on the other side of this crisis.”