Australia's new regional airline took to the skies yesterday, but one industry expert warned it faced a bumpy ride given the high costs involved.
Regional Express, to be known as REX, is owned and operated by Australiawide Airlines. The consortium is a merger of regional carriers Kendall and Hazelton Airlines.
Kendall and Hazelton were subsidiaries of Ansett Airlines, once Australia's largest domestic carrier, which collapsed earlier this year with unsustainable debts. While Ansett stopped flying, Kendall and Hazelton stayed in the air.
REX will have a fleet of 29 SAAB 340 and Metro 23 turboprop aircraft. It will initially fly 1,300 times a week between 35 regional and metropolitan destinations in New South Wales, Victoria, South Australia and Tasmania states.
But as the new carrier embarked on its inaugural flight yesterday from Wagga Wagga in southwest New South Wales to Sydney, Aircraft Owners and Pilots' Association technical director Bill Hamilton said the airline would be lucky to still be operating within six months.
"Airport charges, fuel charges, the cost of maintaining aircraft, the cost of paying for all the services you have to have for an aircraft ... are really quite high," Hamilton told Australian Broadcasting Corp radio. At the end of the day, this is what will beat them," he said.
But Australiawide Airlines CEO Michael Jones said he was confident of the airline's future. He said that since creating the new airline last Thursday, bookings have increased about 25 percent over the preceding week's figures for Kendall and Hazelton. He dismissed Hamilton's comment as ``both uninformed and irrelevant on the basis that he hasn't seen our business plan.''
Jones said REX was different to other carrier that have tried and failed to break into Australia's regional routes because it was a merger of two established airlines.
"So we don't have to establish the infrastructure, we don't have to train the people and we don't have to establish the markets," he said.
Ansett Airlines and Qantas Airways dominated the sector for decades, but Ansett collapsed this year after a cutthroat price war with Qantas and Virgin Blue.
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