In the letter, REX CEO Neville Howell asks Depury Prime Minister Michael McCormack for a sovereign guarantee on loans to regional carriers if they were forced to collapse, and urged Mr McCormack to take “vigorous, swift and unprecedented action” to ensure that regional aviation in Australia was not destroyed by the impact of the coronavirus.
Mr Howell said Regional Express had initiated a number of measures to reduce costs and are expected to soon announce “drastic schedule reductions as well as dropping some routes altogether”.
“Rex, like most businesses in Australia is already seeing the severe impact of the drop in business due to COVID-19. Just this past Friday we saw our passenger numbers dropping 13 per cent year-on-year,” Mr Howell wrote.
“One cannot even begin to comprehend what the economic impact will be if the infection rate rises to high double digits.”
Mr Howell said the fuel levy should also be lifted for the time being and airports should suspend all passenger and baggage security screening costs.
“While these measures will provide a lifeline to regional aviation, they will still be insufficient to allow the regional carriers to survive the next six to nine months due to the very negative cash flow expected,” he said.
“In these unprecedented circumstances they will need additional lines of credit from the banks which will be almost impossible to obtain.”
“We look forward to your immediate attention on this matter,” signed Mr Howell.
The airline operates the Albury to Sydney route, along with the only Albury to Melbourne route.