Tom Venning (Grey, Liberal Party) Share this | Hansard source

I rise today to speak on a critical matter of importance to every Australian who lives or works outside our capital cities. We are witnessing a slow collapse of our regional airline industry that has unfolded under the watch of Labor. The facts are stark. Under this government, two regional airlines have collapsed. First we saw the demise of Bonza, a low-cost carrier that promised to connect our regions but instead left passengers stranded and Boeing 737s repossessed. Now we've watched the slow and painful administration of Rex, an airline that has been the lifeline for bush communities for decades, including Ceduna, Coober Pedy, Port Lincoln and previously Whyalla and Port Augusta.

Although the government is celebrating Air T's acquisition of Rex, the details of the deal paint a concerning picture. The primary beneficiaries of Rex's decline seem to be the administrators, with EY collecting $25 million in fees, while the airline itself faces a heavy financial burden. The new arrangements carry forward $90 million of debt and adds $60 million as a commercial loan, and they're supplemented by $50 million from Air T themselves. This raises a critical question: how will Air T, a company with recent adjusted earnings of only US$7.4 million, finance such a commitment? When paired with their promise to expand an ageing fleet of 30 aircraft to 44, the viability of the plan is uncertain.

What happens in the future when the new owners realise, as others have, that serving our remote communities is difficult? The government has pumped over $160 million of taxpayer money into keeping Rex afloat during this administration, yet they cannot guarantee that the current network will survive. We have heard vague assurances about critical aviation links, but regional Australians know that 'critical' is corporate code for 'profitable'. We face a future where Air T could focus on select high-yield routes, leaving smaller towns even more isolated. Look at the cost being borne by our local communities right now. Rex owns several regional airports managed by local councils. The City of Albany is owed $456,000. The Shire of Esperance is owed $440,000. Under this deal it is doubtful those funds will ever be repaid. The Labor government is effectively asking ratepayers in regional towns to forgive bad debt because the Commonwealth failed to manage the aviation framework correctly.

The collapse of Bonza and the administration of Rex have left us with a sector that is more concentrated than ever. The Qantas Group and Virgin Australia now hold a combined 98.3 per cent of the market. This duopoly is suffocating competition. What is Labor's response to this concentration and soaring costs? A review. The Treasurer has asked the Productivity Commission to investigate why regional Australians are suffering high airfares. This is laughable. They don't need 18 months and a series of public hearings to tell us why airfares are high. I will tell you: prices are high because competition has been decimated by rising costs under this government. The minister's aviation white paper found that the average ticket price per kilometre was 52c higher for regional flights than capital city routes. In Grey, in regional South Australia and in the outback we know this. We live this. Yet this government's solution is to wait for a report that won't arrive for a year and a half. By the time that report lands, how many more routes will have vanished? How many more airports will close?

I'd like to know why an airport like Whyalla, which only receives one flight some days, needs eight staff for security screening? I'm sure the people of Whyalla would happily come to the airport 20 minutes earlier if they halved the cost of security from 60 bucks to 30 bucks. Even better, share the cost of security across every airfare in Australia. We are staring down the barrel of a future where regional travel is becoming a luxury for the wealthy, not a service for regional communities.

The government has botched the transition of air services. They have withdrawn programs that support regional airlines with capital upgrades and security screening costs. They have sat on their hands while fees and charges rise, hurting the ability of smaller carriers to compete with the big players. We need a government that understands that aviation is not just about Qantas and Virgin fighting for the city routes. We need one that understands that this is also about the staff at Anna Creek Station, Indigenous communities on the APY Lands and the students in Port Lincoln.

Regional Australia deserves better than a government that just manages decline while airlines fall from the sky.

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