Major job losses revealed amid Rex collapse

The shocking number of job losses has been revealed after a major airline collapsed, with flights cancelled and planes grounded.

Workers have been hit with major job losses after the regional airline collapsed.

Flights have been cancelled as the airline, under Regional Express Holdings Limited, went into voluntary administration on Tuesday.

The airline’s domestic fleet of Boeing 737 services has been grounded in the collapse, while flights between major airports have been cancelled.

But flights between regional locations are unaffected.

Federal Transport Minister Catherine King says the government will work closely with administrators “to ensure a strong regional aviation presence in the future.”

“The government will act expeditiously, but we will also be acting carefully in this space,” she said, saying nothing had been ‘ruled in or out’.

“It is a complex situation with multiple commercial arrangements in place, but we do stand ready to work very closely with the administrators because that regional presence is absolutely vital.”

The Transport Workers Union (TWU) has revealed more than 600 jobs have been lost in the move, with 360 jobs set to be made redundant.

A further 250 job losses has also been reported, with TWU national secretary Michael Kaine calling it “another dark day for aviation”.

“Over 600 families (are) faced with sudden joblessness in an industry that has taken hit after hit,” he said.

“We are working to secure job opportunities at other airlines and aviation companies for ground crew, cabin crew and pilots, and have had positive conversations with Virgin Australia and ground handler Dnata.”

Mr Kaine said administrators acted swiftly to give workers clarity, but noted it’s “not the news workers hoped for”.

“The focus now must be on maximising jobs, protecting regional routes, securing redeployment opportunities to other aviation businesses and ensuring entitlements are paid as soon as possible,” he said.

“We are calling on the Federal Government to act with an equity stake in Rex, and a Safe and Secure Skies Commission to provide a voice to workers, passengers and the community for aviation.”

A consultation on job losses has commenced and is set to conclude today, at which point the total number of job losses will be confirmed.

Travellers have been warned not to go to the airport as flights are cancelled amid the Rex collapse. Picture: NewsWire / Jeremy Piper

Support ‘welcome’ by administrators

Ernst & Young has been appointed as voluntary administrators for Rex, and Samuel Freeman, Justin Walsh and Adam Nikitins are set to manage the administration.

Mr Freeman said support was “welcome” after Qantas offered to assist following the collapse.

“We welcome all the support that Rex can get at this point in time and we’re receiving it from a great number of places,” he said on Sky News on Wednesday morning.

Mr Freeman said there will be a “significant number” of job losses “reflective of the change in the operations”.

He added administrators have commenced discussions with the employee group and Rex.

“Clearly there is a major structural change underway and that is no longer operating the domestic capital city flights,” he said.

“So there will be staff changes and we’re trying to navigate what is a very difficult time for the employees of Rex and they’re a wonderful group of people, the ones that I’ve met so far.

“We’ve tried to do that as quickly as we possibly can to give them some certainty as to what the way forward is and we expect that will be better known in the coming days.”

‘Do not come’: warning to travellers

Travellers have been warned not to go to the airport following the collapse.

Melbourne Airport spokesman Andrew Lund warned travellers booked with Rex not to go to the airport amid the collapse.

“Look, if you are booked on a Rex jet service – so that’s any flight that was due to be operated by Rex to any of the major capital cities or the Gold Coast – do not come to the airport,” he said.

“Your flight won’t be operating today. Virgin Australia is offering to re-accommodate Rex passengers, so anybody who was due to travel on Rex in the next 48 hours should call Virgin Australia for re-booking.

“Anybody booked further ahead than that should go on to Virgin Australia’s website.”

However, travellers booked for Rex flights on small propeller planes to places such as Merimbula, Mount Gambier or King Island should still go to the airport as normal.

“Those flights are still operating, so that is important to clarify,” Mr Lund said.

“But for the jet services, if you do end up at the airport – and we would certainly advise people who are booked on those not to go to the airport – but anybody who does find themselves there people will be set up to Virgin Australia for re-booking.”

Prime Minister Anthony Albanese said Rex was an important airline. Picture: NewsWire / Max Mason-Hubers

Airlines step in for affected travellers

Virgin Australia chief executive Jayne Hrdlicka said “everything (the airline) is doing today is to support the regional business in the future”.

“We are keen to make sure that Rex is successful,” she said.

“Their regional business has such a vital role to play in regional communities across this country. It has for a long, long time.”

Qantas Group have also said they “stand ready to assist” following the “sad” news, offering affected travellers a chance to be re-accommodated on Qantas and Jetstar flights at no charge where seats are available.

“We are also prepared to connect Rex employees with potential opportunities within the Qantas Group as they go through the process of voluntary administration,” Qantas said in a statement.

Travellers with existing or cancelled flights have been given the chance to transfer their ticket to select Virgin Australia flights, and eligible customers will be “re-accommodated” on Virgin flights “as close as practicable to their original time of travel”, according to an EY statement.

“Rex and Virgin Australia are also exploring opportunities to support regional customers, which include Virgin Australia selling Rex’s regional services through codeshare or interline arrangements, and making Velocity Frequent Flyer benefits available to Rex’s regional customers,” the statement read.
“The administrators would like to thank Virgin Australia on behalf of impacted Rex customers and regional communities for its support during this difficult time.”

Regional Saab 340 flights are “currently unaffected” by the collapse.

“Prepaid ticket holders will continue to have their tickets honoured by the Rex Group on regional routes,” EY’s statement read.

Government ‘prepared to play a constructive role’ after collapse

Treasurer Jim Chalmers said the government was “prepared to play a constructive role” following the collapse, and assured workers they will try to “minimise job losses”.

“Overnight the company contacted its customers and said that the regional services will continue. If that’s the case, then I think that would be a big relief for a lot of Rex customers,” he said.

“I wanted to say to the hundreds of Rex workers who would be really worried this week that the (transport minister) Catherine King has been speaking with the other airlines to make sure that where it’s possible we get people redeployed so that we can try to minimise these job losses and focus on the regional services, which we know are so crucial to regional communities.

“We are obviously prepared to play a constructive role here, but we need to hear from the company and its administrators first. I don’t want to pre-empt the sorts of considerations that we might be making.”

The collapse is a ‘worrying time’ for hundreds of workers, the Australian Services Union says. Picture: NewsWire / Jeremy Piper

Sydney Airport chief executive officer Scott Charlton said his thoughts were with travellers and employees who would be affected by the collapse.

“We are pleased to see that the administrator will continue regional operations to and from Sydney during this period as these services are critical for many regional communities,” he said.

He added the collapse is evidence change is needed in the aviation market in order for “competition to thrive”, because “recent history suggests the barriers are too high”.

“We have a rare opportunity to get this right with the proposed slot reforms at Sydney Airport and through the imminent Aviation White Paper, and we remain ready to work with the government on implementing both,” he said.

‘Worrying time’ for hundreds of workers

The Australian Services Union assistant national secretary Emeline Gaske said the move has marked a “worrying time” for hundreds of workers, with the union set to work with administrators to “try to save as many jobs as possible” and ensure members entitlements are “protected”.

“It’s particularly concerning that Rex has been placed into administration so closely after the collapse of Bonza – another airline that provided services to regional locations,” she said.

“Regional air travel not only facilitates access to otherwise isolated communities, but regional airlines play an integral role in providing quality local employment opportunities.”

Sydney Airport chief executive officer Scott Charlton said his thoughts were with travellers and employees who would be affected by the collapse. Picture: NewsWire / Jeremy Piper

Ms Gaske called on the government to take steps prioritise regional air travel routes.

“Too many jobs are dependent upon a thriving airlines industry,” she said.

The collapse comes after widespread speculation the airline was going under, after bookings were suspended on some of its services and a trading halt was announced on Monday.

A Rex employee told The Australian airline crew had also been turned away from a company-designated hotel at Brisbane Airport over “unpaid bills”.

The Prime Minister said on Tuesday his government would look at “any proposals” to help Rex after it went into a trading halt on Monday, but took a shot at the carrier for running non-regional flights.

Speaking to reporters in Sydney, Anthony Albanese on Tuesday said Rex was an important airline that received “substantial government support with no conditions attached”.

“One of the things that I expressed concern about was that Rex moved away from their traditional role of being a regional airline into flights from Sydney to Melbourne,” Mr Albanese said.

“Rex as a regional airline provides important links with regional communities and particularly between capital cities and regional communities. It is important for those local economies.”

The prime minister’s comments came amid calls for his government to act as Rex’s future hangs in the balance, and just months after start-up airline Bonza went bust.

Originally published as Major job losses revealed amid Rex collapse