Virgin Australia CEO’s pledge to ensure the survival of Rex’s regional flights

Virgin Australia has pledged to do whatever it can to ensure Rex’s regional flights continue — except for taking over the operation.

Virgin Australia chief executive Jayne Hrdlicka has left the door open to playing a future role in Rex’s regional operations when Qatar Airways comes on board as a major investor in the airline.

Before Rex sank into administration, Virgin Australia had been involved in talks about the potential for a partnership to help both airlines compete against Qantas and Jetstar.

The discussions were believed to be thwarted when a boardroom stoush erupted at Rex, after ousted chairman Lim Kim Hai sought to reclaim his post by voting out the directors who opposed him.

Speaking after the announcement of Qatar Airways’ plan to take a 25 per cent stake in Virgin Australia, Ms Hrdlicka said she did not see them taking over Rex’s regional flights, but talks were ongoing.

“Our focus with Rex has been to try to focus on how the regional business can be successful over time. That infrastructure is vital to Australia so we have offered, from early days, the strength and capability from our business to support that business,” she said.

“We remain committed to do that, whoever the owner of the business is on the other side.”

Although Ms Hrdlicka said the regional business was “very different” to Virgin’s core business, the airline was keen for the ­operation to survive.

“We’re going to do everything we can to support that, through the commercial and marketing support we’ve already offered,” Ms Hrdlicka said.

The federal government has also stated its commitment to the regional flights, with Transport Minister Catherine King saying “no options were off the table”.

Virgin CEO Jayne Hrdlicka in Brisbane. Picture: Sarah Marshall

To date no buyer has emerged for the regional airline business during the administration process, which is being managed by EY partners Sam Freeman, Justin Walsh and Adam Nikitins.

Brisbane-based Alliance Aviation, which was previously the target of a takeover by Qantas, said it was definitely not in the running for Rex.

Managing director Scott McMillan said they were not interested in “any part” of the Rex business, which encompassed charter operation Pel-Air, a flight training academy and the ­regional airline.

As Virgin Australia continued to talk up the investment by Qatar Airways, which remains subject to regulatory approvals, it appeared the carrier was on track to nail down a second major deal.

Voting on a new enterprise agreement for pilots will close at midnight on Thursday, with high hopes the pay deal will get their support on this occasion.

Both the Australian Federation of Air Pilots and Transport Workers Union have backed the proposed agreement, which promises a 15 per cent pay rise in the first year and 3 per cent increases in each of the next two years.

For captains, this will mean base salaries climb by $60,000 from $238,750 to $298,908 in the three years of the agreement.

At the same time first officers will see their base pay increase by almost $40,000 from $155,667 to $194,290 over the three years.

In return for the pay boost, which reversed cuts made during the Covid pandemic, pilots’ designated days off would be reduced from 156 a year to 150.

Unions were quietly confident the new deal would get the green light from pilots, who voted down a previous offer 60-40.

An agreement would also put Virgin Australia one step ahead of Qantas, whose short-haul pilots rejected their pay offer this week.

Just over 63 per cent of Qantas domestic pilots voted down the deal, which includes a two-year wage freeze.

The AFAP warned Qantas not to resort to its “traditional hostile bargaining tactics” in response to the rejection, warning the negotiation could escalate.

“This negotiation does not need to become a protracted dispute if Qantas is willing to work … in good faith,” said AFAP executive director Simon Lutton.

Originally published as Virgin Australia CEO’s pledge to ensure the survival of Rex’s regional flights