Transport Workers Union hit out at Qantas over collapse of Rex Airlines

A union boss has unleashed on Australian airline Qantas amid the shock collapse of a rival carrier, which could now see over 600 jobs axed.

A union boss has hit out at the “cutthroat” aviation industry, taking aim at Australian carrier Qantas over yet another company falling into collapse.

Regional Express, better known as Rex, announced on Tuesday it had fallen into insolvency and entered voluntary administration after a disastrous attempt to compete with Qantas and Virgin Australia.

The airline announced they would ground all its Boeing 737 jets and cease flying immediately between Australia’s major cities, including Sydney, Brisbane and Melbourne.

Its flights to and from regional cities, such as Dubbo and Armidale, which use smaller Saab 340 turboprops, will continue as normal.

After the announcement, which comes just months after start up budget carrier Bonza went to the wall, Transport Workers Union say more than 600 workers will be axed in another “dark day” for the industry.

TWU National Secretary Michael Kaine has unleashed on Qantas over the collapse of Rex Airlines. Picture: NewsWire / John Appleyard

Qantas Airways CEO Vanessa Hudson said earlier this month she doesn’t believe in more than three airlines in Australia. Picture: NCA NewsWire / Martin Ollman

Speaking in Sydney on Wednesday, TWU National Secretary Michael Kaine took aim at Qantas — saying the “vicious, hyper-competitive and unregulated market” has allowed “an immoral Qantas to dominate at the expense of workers and the community”.

“This is a cut throat industry,” Mr Kaine said.
“We know the perpetrator of that cutthroat competition in large measure is Qantas. If any company tries to do the right thing by the Australian community, and enter in to any of these more profitable lines in our community … we know what happens. Qantas exerts commercial pressure, deploys commercial pressure on these companies to get their heads pulled in.

“We saw that with Bonza and we have seen it again here with Rex.”

TWU have unleashed on Qantas amid the second airline to collapse in Australia in as many months. Picture: Jenny Evans/Getty Images.

When Australia was still in the midst of the pandemic and Virgin’s future was looking shaky, Rex made a bold attempt to expand.

It entered the most profitable – and most competitive – markets for air travel launching flights between the major capital cities.

With only smaller turboprop planes, Rex leased former Virgin Australia 737s to take on both Virgin and Qantas.

Rex tried to compete with Virgin Australia and Qantas on more profitable, but highly competitive, routes.

But with fewer frequencies, lower brand recognition and two formidable competitors, Rex struggled.

In June, Rex slashed fares between Melbourne and Perth to less than $100 one way, in a bid to win custom from Qantas and Virgin. But it couldn’t make the more competitive routes stack up financially.

The airline lost more than $3 million in the first half of 2023/2024.

More than 600 jobs will likely be axed amid the collapse. Picture: William WEST / AFP.

After the collapse of Bonza, and in the weeks leading in to Rex’s collapse, Qantas Airlines CEO Vanessa Hudson cast doubt on there being enough room in Australia’s domestic market for more than three airlines.

“History proves not (in having more than three airlines in Australia),” Ms Hudson said earlier this month at Perth Airport.

“If you think of why three airlines really struggle, it’s a number of things. One is its our (smaller) population.

“The economics of being a viable airline, it’s incredibly challenging. It’s capital intensive, the next biggest challenge we have is decarbonisation, so that is significant. We believe that all carriers in the market – no one can be winners or losers from decarbonisation. Everyone should be doing it, it’s the right thing to do.

“I don’t think there is sufficient volume to sustainably support a significant growth in the number of players.”

Rex employees allegedly told they will not receive wages or redundancy packages. Supplied

Meanwhile, it is understood the administrators overseeing Rex Airlines, being Ernst Young, have told hundreds of those employees they are unlikely to receive their wages or redundancy payouts for “months” and that the business will cease operating by the end of the day.

According to the ABC, administrator Justin Walsh told employees that the business was “not viable” and that the company “was not in a position to pay the wages of its employees moving forward.

“Put simply, I guess the company is unable to meet the costs that it will need to incur to keep operating,” Mr Walsh said.

“With the business not operating and unlikely, almost certainly, not able to recommence operations in the future, it’s unfortunately the administrators view that the position of each of the staff of the company on this call needs to become redundant.

“The simple fact that I have access to insufficient funds to pay your wages, leaves the administrators with no choice but to conduct that consultation process over a very short period.”