Regional Express has welcomed an announcement from the Deputy Prime Minister and National Party leader Michael McCormack on relief measures to assist airlines amid the dire operating environment following escalation of the COVID-19 outbreak.
Rex warned the Deputy Prime Minister in an open letter on March 16 that regional carriers would not be able to survive more than six months without assistance, with smaller operators having only weeks of reserves.
The announcement of a $715million relief package came just two days after Rex's public plea to the government.
Rex stated it is not simply relying on the government assistance package, and that its board and management have instituted a broad range of measures to cut costs and conserve cash, including sizing the network to match the expected sharp downturn.
The exact network changes will be announced in the coming days, but Rex expected about 40 per cent of capacity would be taken out, with some routes being cut altogether.
Rex executive chairman Lim Kim Hai on Wednesday commended the Deputy Prime Minister on the relief package announcement.
"Michael and the Morrison government have demonstrated firm and decisive leadership in putting together this package within such an incredibly short time frame.
"The situation is extremely dynamic and Australia is fortunate to have a government that is very proactive and nimble.
"This is a great start, and we thank the Deputy Prime Minister for hearing Rex's voice and understanding that these measures are crucial to give Rex and all regional carriers a fighting chance to stay afloat."
However, Rex said it was disappointed the package did not include a sovereign guarantee on new loans to tide carriers through the period of disruption, "and we are hopeful that this will be adopted in a second stage of assistance".
"Rex and all Australian carriers owe the government a huge debt of gratitude for providing this precious lifeline without which all regional carriers and we believe some domestic ones too, will go into administration. Rex wishes to place on record our most profound gratitude," he said.
Rex anticipated that with virtually no debts and with the newly announced government assistance it would be able to survive at least six months if the current situation does not deteriorate much further.