Source: Australian Ministers 1
KARL STEFANOVIC: Well, Rex Airlines has been saved from the brink after being snapped up by a US company. But the battle over essential service routes has only just begun. For more, we’re joined by Infrastructure and Transport Minister Catherine King in Sydney. Hey, Catherine. Good to see you this morning. Look, the government has signed off on the deal. It started as a $50 million bailout, then I think it went to 80. Just how much have we have we given them?
CATHERINE KING: So we haven’t given Rex Airlines anything. What the government has done isi three things. One is funded the continuation of Rex as an airline through the administration period to allow those important regional routes and regional services to keep going. We then provided a customer guarantee, so to make sure people kept booking with Rex to say if you couldn’t fly, then you’d get your money immediately refunded. I’m so grateful to the hundreds of regional Australians who’ve continued to operate on Rex. You’ve kept the airline in the sky and you’ve kept jobs. And then the other thing is we bought the debt of the major creditor so that it wouldn’t suddenly force it into a sale, because we knew from the administrators, we needed time, time to actually really get a handle, for the administrators to get a on what was happening with this business, and then actually then find a buyer for the business. And that’s really what the government has stepped in to do. Some of that money, as we’re creditors, we would expect to get some of that back. And then obviously, that’s sort of the commitment we made as a government, because we knew Rex was too important to fall over, and we wanted to try and make sure we had those services for regional Australia.
KARL STEFANOVIC: You didn’t give them any money. Effectively you bailed them out. How much did you bail them out to the tune of?
CATHERINE KING: Basically, so all of that’s on the public record, I think, as I said, the 50 million in debt, I think it was 130. But as I said, not all of that is none of that’s actually gone to the airline itself. It’s gone to the administration to keep them actually going. So, the previous operators of the airline haven’t received any of It’s actually gone to the administration to keep it going, so we could save an important regional service.
KARL STEFANOVIC: Is Air T the right buyer considering they’ve never operated a regional airline?
CATHERINE KING: Well, that’s a matter for the administrators. The government hasn’t undertaken the sale process. Obviously, the administrators are looking for the best outcome for creditors. That is their job. The government has stepped in because we want to get the best outcome for regional Australians, and that’s why we’ve been working so hard to get this outcome. And as I said, against some Opposition from the Liberal Party and National Party, I was surprised by who said our intervention was “a bridge too far”, frankly. So, you know, we’re very, very pleased that the administrators have now come out and said they have a buyer. It’ll now be up to the second creditors meeting to determine whether they accept that.
KARL STEFANOVIC: My only concern is that, I mean, these guys trade in parts that there’s no chance they’ll just shut it down and break up the planes.
CATHERINE KING: We’ve done a lot of due diligence as a government on company as has the administrators, these are long term aviation operators, they buy businesses to grow their business. And that’s one of the good things about that, because Rex obviously owns and operates Saab aircrafts. They are coming you know they’re not making them anymore. So really having access to parts means that they can extend the life of that aircraft while they look at recapitalising, the actual airline itself. So that again, you know, I don’t want to bias any of the creditors’ process, but the administrators have got to. And the due diligence that we’ve done on this company, they’re long term investors in aviation. They’re not, you know, a venture capital company coming in and trying to strip the company and get out. They’re an aviation business.
KARL STEFANOVIC: The point is you’ve got to know what you’re doing, especially in Australia. There’s some really interesting little companies like East Air operating out of Cairns that I note with interest has started up. Maybe they’ll be able to fill the gap if Rex falls over again. But overall, I think it’s a good thing just to make sure that this company does the right thing.
Look, also looking at Western Sydney Airport, it’s almost ready for takeoff. It’s getting pretty exciting now out there.
CATHERINE KING: Yeah, it sure is. So we’ve got a Cessna testing the flight paths. We’ve got Civil Aviation Safety Agency CASA is supervising those tests. We’ve got the baggage handling system being tested. And next week you’ll see a 737 also testing the flight paths. And there’ll be an emergency operation, a test up there as well of all the fire services and other emergency procedures. So a lot of testing is happening to get this airport operational; first freight middle next year, first passengers at the end of next year. So she’s nearly there.
KARL STEFANOVIC: Do you mind if the today show does a broadcast on the runway before it opens up?
CATHERINE KING: You’ll have to ask the airport itself.
KARL STEFANOVIC: Come on, Minister.
CATHERINE KING: I reckon you should. I reckon it would be unbelievable. Well, they’re the operators, so, you know, you know, safety, safety, safety first when it comes to aviation. But I’d love you to. I want so many people to go out there. It is absolutely, it’s a magnificent airport. She’s going to start slow. You know it’s not going to have the same number of flights as Kingsford Smith on day one, but it’s such a huge opportunity for those, you know, millions of people who live out in Western Sydney to actually have jobs, but also to access an airport themselves around the country and to the world.
KARL STEFANOVIC: That’s terrific. Western Sydney absolutely booming. Well done. Nice to have you on. Appreciate it. And we’ll see you at the broadcast.
CATHERINE KING: Great, great.
SARAH ABO: Also no curfew at that airport, very handy indeed for NSW.