How much Rex subsidies costs the Queensland Government

The mayor of a regional community reliant on heavily subsidised Rex airlines believed nationalising it would not only waste money, but would be loaded with inefficiencies.

Rex Airlines Boeing 737 planes lay idle on a tarmac after entering voluntary administration in July. Picture: William WEST / AFP

Regional leaders reliant on million dollar state government subsidised routes to their communities believe nationalising Rex Airlines will be flushing taxpayer money down the drain.

Longest running Queensland Mayor John Wharton said the North West did not want to lose the services the airline provides, but was concerned about inefficiency and bureaucratic bungling of a publicly owned company.

Mr Wharton was cynical of Prime Minister Anthony Albanese’s suggestion of a “potential Commonwealth acquisition” to keep Rex going, which went into administration last year, and believed the solution was a lower sale price to appeal to rival airlines.

The Richmond mayor said his company depended on Rex Airlines’ three services a week, and believed this was likely to increase daily because of an expected workforce boom brought about by construction of the multi-billion dollar CopperString transmission line.

While Rex services most states, it relies heavily on Queensland Government funding to service seven regional routes, which cover places such as Richmond, Hughenden, Roma, Birdsville, Winton, Boulia, and Normanton.

Richmond, Qld, Mayor John Wharton said Rex provided a vital service to his remote community but that nationalising Rex would be a waste of taxpayer money.

In the last financial year Rex received $11.9m in Queensland Government funding to cap airfares, which Mr Wharton believed was necessary to keep the services profitable.

“Rex should have stuck to what they were doing, they went off to compete against Qantas and Virgin on the coast, and they could have been a very successful regional airline,” Mr Wharton said.

“I don’t know how they fix the problem, but I should be concerned if the federal government was to take it over, governments don’t usually run businesses very well.”

A map showing Rex Airlines' routes, with green lines showing the routes the Queensland Government subsidises. Picture: Rex Airlines

Mount Isa based KAP leader Robbie Katter – who in 2021 during the government’s tenders for subsidised services opposed Rex in favour of Skytrans – believed the federal government would waste its money on ageing planes if it bought Rex.

Mr Katter said the minor party believed in nationalising air travel but believed Rex’s infrastructure was ill-suited to a government buy-in.

He said the proposal would be an undeserved “golden handshake” for a company that already received an $80m bailout last year, on top of millions of dollars in grants during the pandemic.

Minister for Transport and Main Roads Brent Mickelberg said he was prepared to work with the federal government in order to keep flights available to regional Queensland communities. Picture: Richard Walker

Minister for Transport and Main Roads Brent Mickelberg remained open to nationalising Rex, saying the state government would work with the federal government if it kept regional communities connected.

He said subsidising routes was a scheme the government had taken on for decades because of how much it increased regional liveability.

The Queensland Government regulated services and capped airfare prices to 23 regional communities with a total $19.m going to the scheme in the past financial year.

Funding went to Qantas, $3.8m, Skytrans, $2.5m, and Hinterland Aviation, $1m.

Originally published as How much Rex subsidies costs the Queensland Government