'Dark day in aviation' Rex cuts 610 jobs, enters voluntary administration 05:45

Well, let's get the very latest on the dramas with Rex, Regional Express. Administrators have now said 610 people at Rex are likely to lose their jobs. 610. That includes pilots, cabin crew and ground crew.

and the Rex airline business, which serves 737 flights, they have these 737 flights across capital cities, that will fully shut down. So they won't be flying Sydney to Melbourne, Sydney to Brisbane, that's done. There will be no more Rex flights between capital cities. The regional flights, which is what Rex is known for, those are safe for now, but it's a big blow to Australia's aviation industry. Michael Caine, National Secretary of the Transport Workers Union, he's on the line for us. Michael, g'day. Hi.

G'day Chris. 610 people, it's a pretty hefty number. Well it's another one of those dark days for aviation. It seems that this industry is in perpetual crisis. How many times have we spoken about this? We've got 610 families today facing joblessness and 900 more are facing a voluntary administration process while we figure out how we get regional wrecks back in the air and to viability.

And, you know, this is a question for us as a community. At the moment, of course, Chris, we're focusing on how to make sure that the workers are properly looked after. They can go to twu.com.au because there's a landing page there. Give us your details and we'll take care of you and the administration as we did during Virgin, as we did during Bonza. But

But it is really difficult. Redeployment is important. We've spoken to Jane Herdlicker from Virgin. She's prioritising expressions of interest for workers there. Same with Donata, ground handling. So there are some opportunities, but it is another disastrous day for aviation. You're not going to get 610 people jobs, though, are you?

Well, it's going to be very difficult. I mean, this is absolutely disastrous. Think about those families waking up this morning to the administrator with this news. So, look, we have to do what we have to do and redeployment's a key point in that. And then, of course, it'll be about making sure that there's entitlement available.

Unfortunately, the administrators indicated that those jet routes are going and the company where those jet routes were housed is going to be closed down and there's no money. So we want in that circumstance, Chris, for the administrator to put that company in liquidation as quickly as possible because it's only then that the fair entitlements guarantee scheme of the federal government kicks in for these workers.

I was looking at John Sharp, right? He's a former federal minister. He's the chair of the board of Rex. I know there's been all sorts of stuff going on at board of director level, but at what point does the board have to put their hands up and say, you know what we've done? We've balls this up.

Well, look, I think there's responsibility on all sides here. Clearly, there's been musical chairs. There's been infighting at the Rex Board level and CEO level. You know, that's not good enough. But you wonder why that happens. And it's the context of this industry, Chris. It's incredibly competitive. It's cutthroat, in fact. It is.

And we've got to get our heads around that. We can't just keep putting our heads in the sand about this industry. We've got to figure out what the settings are so it can be more sustainable into the future. In the Fed Income Department, though, Rex should have never gone along the capital city route, correct?

Well, I don't know about that. I mean, you know, they saw an opportunity as far as we can see in COVID. It looked like Virgin wasn't going to come out of administration. I'm really thankful that it did and lots of people shoulder to the wheel to make that happen. But it looked like it wasn't going to come out of administration. I think in those circumstances, Rex took...

a commercial risk, and the commercial risk was, well, let's grab some 737s, let's put them on these routes, and we might be in business here to take some of that profit. Yeah, but it was never realistic, Michael. You know, they raised $150 million in November of 2020 to lease the old Virgin Australia 737s,

launching flights between Sydney, Melbourne and Brisbane and they wanted to capture 37% of the domestic aviation market by 2025. They got 6%. Failure. Yeah, look, I'm not here defending Rex today of all days. I'm simply making the point that we've spoken about this before. This is an industry, it's cutthroat. Of course there's one commercial dominant corporation and that's Qantas and

and they will flex their muscles and they'll continue to. So that's why we've been saying, Chris, for some time, as you know, that we need a standalone regulator here that can look at these competition issues, can look at these issues about contractual arrangements and can start making decisions in aviation that are based on the community interest, on the interest of regional Australia and not just in the interest of the really large companies who are making massive profits.

Michael Caine, I appreciate your time. What bothers me with people like John Sharp, he comes on the radio, he's a relatively decent guy, he spruiks how Rex is bigger than Ben Hur and all the rest of it. And then look what's happened. 610 people because of their decision, 610 people, 610 families without income. That doesn't sit well with me.

No, I absolutely agree. It's another dark day in aviation and we've all got to figure this out as a community, otherwise it's just going to keep happening. Michael Caine, good on you. Keep fighting.