Aviation industry "approaching collapse", warns Rex

Aviation industry "approaching collapse", warns Rex
By admin


Regional Express has issued a dire warning of the imminent “collapse” of the Australian aviation industry as the airline prepares to report a dramatic slump in profits.

The carrier said many regional airlines will soon follow the same fate as Aeropelican and Brindabella and go to the wall if the Government does not take "immediate and forceful" action.

Rex painted a near-catastrophic outlook for the industry, saying the “entire aviation industry is financially haemorrhaging right now and approaching collapse”.

Chief operating officer Garry Filmer pointed to Qantas’s likely $300 million loss in the first half and Virgin Australia’s deficit of around $50m as a sign of an industry in crisis.

“Regional aviation is even harder hit as the profit margins are slimmer,” he said. “We have already seen the collapse of two of Australia’s oldest regional carriers during this financial year – Aeropelican and Brindabella – and in today’s toxic aviation environment, more will likely follow suit.”

Rex’s own profits in the six months to December will plummet 60% to around $5m, with a sharp decline in business traffic largely to blame.

Filmer called on the Abbott Government to take action and to honour election commitments outlined in the Coalition’s aviation policy.

So far, the Government has “not made any significant inroads to reversing the devastation inflicted to the economy by the previous government”, he said.

"Many regional carriers have little time left before they face the same fate as Brindabella," Filmer said. "For many parts of regional Australia, this would spell the end of regular air services forever and it would be ironic if it were the Nationals that presided over the outcome."

The carbon tax has been one issue Rex has identified as crippling on regional aviation.

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