TRANSCRIPT: INTERVIEW WITH THE AUSTRALIAN (ROSIE LEWIS) RE REX AIRLINES, 1 AUGUST 2024
Subjects: Rex Airlines
E&OE
STARTS: 3pm (AEST)
ENDS: 3:08pm
ROSIE LEWIS:
Given what's happened with Rex and the various comments being made to and fro this week, you may not have heard Rod Sims this morning – he was on ABC radio and we've done our own interview and he's been scathing of the lack of reform by the Government in the airport slot space. I just want your insight, so Albanese really appears to be blaming Rex's decision to enter the capital city to capital city market on its demise. Obviously as Minister during COVID, you gave $62 million I think the number was, to sort of prop up Rex, through the pandemic. I know the other airlines got money.
MICHAEL McCORMACK:
Yeah, of course, and more money.
ROSIE LEWIS:
I just want to get your thoughts, was it Rex’s decisions, or what do you blame on the collapse of Rex?
MICHAEL McCORMACK:
Oh, this probably a number of factors and look, the fact that Rex survived through what was a terrible ordeal with COVID-19 and the aviation sector generally – a time in which 26 national carriers, as I understand, of comparable size to say, Virgin went under – right across the world. Rex came out of it, not only did they come out of it, but they then decided to expand, they decided to take on Qantas and Virgin, but mainly Qantas on the Melbourne to Sydney route, which is one of the busiest routes in the world, but other capital city routes. And look the aviation sector is a very volatile industry, it really is.
And you know, margins are very thin. You have to be really good at what you do and exceptional all day, every day to just make ends meet at some periods, because there are lots of factors why people don't buy tickets. You know, the cost-of-living crisis would probably play a part in people deciding to stay at home and not travel as much or not to fly as much as they otherwise would, there's a whole host of factors. But look, going into the capital city to capital city markets probably hasn't helped Rex ultimately in the long run because they were a world-renowned, internationally acclaimed, award-winning regional airline. They had more than 50 regional routes. They did very well, and they have decided to take on the big boys and now they're in a situation of financial freefall. And for those places like Ceduna and remote areas of Australia which only has Rex flying into them, they are very worried because this is so critical – it’s life and death. Some people won't be able to make capital city medical appointments and Rex was the only way they could help getting out of remote cities and into those appointments in capital cities. Look, I spoke to Anthony Albanese yesterday, and I spoke to Catherine King as well. But the Prime Minister gave me assurance that the Government would, moreover, continue to allow Rex to service those country centres. They may well take an equity stake in Rex, that remains to be seen. But I think the important thing is we continue to service the country people who need it.
ROSIE LEWIS:
Given the money that Rex received during COVID, do you think that's what enabled them to get into the capital city to capital city market? And should there have been conditions by your Government attached to that money?
MICHAEL McCORMACK:
Well, look, there were no rulebooks around what to do and what not to do in COVID. And, you know, you look at the Johns Hopkins Center, which has indicated that Australia was the second-best for its COVID response in all of the world. I'm quite proud of and I have no qualms about what we did not just in the aviation space, but in the transport space generally. I mean, at a time when everybody thought they needed 10 rolls of toilet paper every time they wanted to go to the toilet, we got trucks over the border in minutes. Whereas, before we stepped in and intervened, they were taking hours to get trucks across State borders. And so with not much co-operation initially and then a whole host of co-operation we were able to get the transport and the logistics right – right across the country. And there were a lot of State Labor Transport Ministers who really helped me in that regard. And look, and I know at the time there was, I was accused of being the “Minister for Rex”. Well, I wore that as a badge of honour, quite frankly, because Rex actually saved lives during the COVID-19 pandemic. They transported personal protection equipment, they transported medical professionals, and later on, vaccines.
That wouldn't have been possible without that domestic airline networks scheme. It just wouldn’t have been possible. And yes, Rex did take advantage of the packages, the rescue package that was on offer. But so did Virgin, Virgin wouldn't have been operating. I know Paul Scurrah did a wonderful job of trying to keep Virgin in the air and later Jayne Hrdlicka. But I worked very closely with both of them and of course Alan Joyce from Qantas too. I mean, they were desperately worried, it was the greatest crisis facing Qantas since the Pilot Strike. I had no qualms about what we did and I have got to say if you look back even at the then Opposition's response at the time they weren't coming out roundly criticising. I mean, you know, everybody has 20/20 vision in hindsight, everybody has 20/20 vision when the dust settles. I think that's a lesson for what should happen now and I do think the Government should intervene and should provide a rescue package for Rex to enable it to continue it to fly, because if it doesn't people will die, it's that serious.
ROSIE LEWIS:
Do you have a preference as to what should happen, should have an equity stake or a bailout package?
MICHAEL McCORMACK:
Well, the Prime Minister indicated to me that it may well be an equity stake. But look, you know, that's a matter for the Government, they're in Government. And, you know Government these days don't generally like to own airlines, or banks, or dams, or roads. I mean that is not what the Commonwealth generally does, these days.
ROSIE LEWIS:
Sure.
MICHAEL McCORMACK:
But look, it's up to the Government. All I'm interested in is making sure that those regional and remote, in particular, centres get airline access. I think it also would also serve the travelling public in those country towns and cities where there is the option to fly other airlines, they really should support Rex because if they don't use it, we will lose it. This is a call out there for those people to very seriously consider flying Rex and make it their first airline of choice, because if they don’t, they will be left with one airline servicing their towns or no airline. Which then of course would be worse, you have a monopoly situation where the ticket prices will go through the roof and people won't be able to afford to fly anyway.
ROSIE LEWIS:
I've personally been looking at what flight I can take from Canberra on Rex but I can't see it out there. So that's something I should let Rex know. They need to make it easier to figure out where you can fly to. But I am sure other people who really need Rex are sure of how they can use it. In terms of what the Government should be doing now, what needs to be prioritised? What has been suggested this morning that the silver bullet is going to be ensuring Virgin and Qantas don’t majority own the slot monitor at the airport and fixing that immediately.
MICHAEL McCORMACK:
Well with the slot situation, I worked fairly closely when I was the Transport Minister with Anthony Albanese, who was the then Opposition Transport Minister, to make sure that we made the most of that slot situation. I always championed, even before I was the Transport Minister and certainly during the time I was the Minister, the fact that regional airlines needed that access into Mascot because if you don't have access beforehand you just don’t have access to Sydney because obviously Western Sydney Airport has not opened yet and you don’t want to be flying into Bankstown. You just don’t want to do it. So you know, it's always a delicate balance. You're always going to get an airline like Rex that might think that they want or need more access to slots. But look, you know, it's a careful and delicate balance. I think we struck it right. I don't know what Rex, what negotiations they've had with the now Labor Government, since we haven't been in government, I'm not privy to those. But Rex has been very well supported by the Government, by certainly the Coalition Government during COVID and even before that. We were always understanding of the fact that they were the regional airline, that serviced Australian communities very well.
ROSIE LEWIS:
The Government said there's been nothing done on slot reform in 27 years but that they're finally doing something through responding to the Harris Review. Is that true?
MICHAEL McCORMACK.
Oh, I reject that. I've sat down with Anthony Albanese on a number of occasions to talk about these issues. I don't think it's time for finger pointing and the blame game – I really don't. Balancing the slot situation is one of those things where you are always going to get airlines, you're always going to get stakeholders and Sydney Airport et cetera wanting something different than somebody else. I don't think to say or to point the finger and say, “Well, it's the first time for 27 years anybody's done something about it.” I think as a whole I think that's a pardon the pun a bit of “pie in the sky”.
ROSIE LEWIS:
What did you guys do?
MICHAEL McCORMACK.
Well, we did look at the slot situation, I mean, I'd have to go back and see where they were when I became the Minister and see where they were when I finished being the Minister. We looked at them, there was there were obviously times when people wanted to change curfews et cetera. But you know it's a delicate balancing act. Rex were treated very well to ensure that they could still fly to Kingsford Smith when there was a lot of pressure by the bigger players, the bigger stakeholders, to take up more of those opportunities. And of course, competition from overseas to take up the opportunities to fly to Sydney. It is one of the busiest airports in the Southern Hemisphere, of course.
ROSIE LEWIS:
It sounds like, you talk about the cost-of-living obviously would have an impact. But you do say that going to the capital city market probably had not helped ultimately in the long run. They were an internationally acclaimed, award-winning regional airlines that more than 50 regional roads. They did very well, and they decided to take on the big boys anow they're actually in the situation that they are in of financial freefall.
MICHAEL McCORMACK.
It's not the only reason Rosie, but of course, it has to be a factor. It has to be a factor. Because at a time when international aviation is recovering from a global pandemic, the likes of which hadn't been seen since the end of World War I. And we all know what the aviation services were like we had only just advanced slightly from box kites, the Wright brothers. I mean, it was the biggest hit that international aviation had ever had. And here’s Rex – they come out of it, Virgin was still struggling to recover, Qantas even were struggling to recover, and Rex decides to enter the capital city to capital city market.
So look it was a bold move, it was a brave move and ultimately, given what's happened this week, it hasn't been a successful move because now Rex is now fighting financial hardship. So I hope they have got the ability with Government help to trade their way out of it. I hope that the travelling public decides to make Rex in regional Australia, at least their airline of choice. I hope the turbulent times they are undergoing now they can recover from that and get back to where they were – a very good regional airline, providing international class service and stick to that.
ROSIE LEWIS:
All right, thank you very much for your thoughts, Michael.
MICHAEL McCORMACK:
Any time at all Rosie, you know that.