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Aviation in the North

As COVID-19 continues to wreak havoc over businesses worldwide, the aviation industry is certainly one sector that has been hit hard, yet continues to fight. We speak to Steve Jones, REX State Manager, on the future of aviation in Cairns and North Queensland

There is endless fun to be had imagining what the world will look like when this grim crisis is over. Will we ever depart from this dystopian non-dancing ‘Footloose’ universe?
Will office workers ever see the office again? Will we forever fear the touch of strangers and be banished to a world of air-kisses and elbow nudges?

While we say this in jest, in the aviation industry it really matters. No other industry has been shuttered down so quickly and with such devastation. However, in the words of Regional Express (REX Airlines) QLD State Manager, Steve Jones, “There are two guarantees in business – when things are going well, they’re probably going to taper off, and when things are terrible, they can only get better.”

Cairns and the Far North have been amongst the hardest hit regions during the COVID-19 pandemic, and according to a recent report from Advance Cairns, visitor spend is predicted to drop $2.2 billion in 2020 and aviation seat capacity to remain at less than 70 per cent of pre-COVID levels for at least the next 2 years. This will have an impact on more than 7,700 jobs in the region from the visitor economy.

With limited international air capacity returning to Cairns in the coming 12-18 months, capturing as much domestic capacity as possible is crucial to being able to support and re-energise the tourism sector and the local economy.

“We’ve seen reports showing that people who would normally be leisure travelling at the moment have extra money in their pockets due to no international travel,” says Steve. “It’s imperative we, the airlines, work together with tourism bodies and State and Federal Government to try new things in order to engage the public to travel domestically. Tourism Tropical North Queensland (TTNQ) and the Gulf Savannah are excellent examples of modifying a product in order to encourage leisure travel to the region during the summer – there is a pent-up demand, and it’s our responsibility to work with that.”

Because Queensland covers an extensive area and has a population that is dispersed throughout regional and remote areas as well as major cities, aviation is essential. In addition to the leisure sector, air connectivity is key to the economic development of the Cairns region. Cairns is the most northern of all major regional centres, so air connectivity also provides opportunities for the export of agricultural produce, opens up new visitor markets and promotes growth in education, cultural and health services. As new air routes are established, the flow on effects for businesses are highly beneficial.

The survival of REX and other regional airlines has been aided by external money, and ongoing support is critical.

The Federal Government subsidised several routes earlier this year, after demand dropped dramatically due to COVID-19. More than $150 million has been handed to the airlines through the Domestic Aviation Network Support (DANS) program and the Regional Airlines Network Support (RANS) which covers any costs the airline cannot due to lack of passengers. That support was due to end soon, but in a recent statement, Deputy Prime Minister Michael McCormack confirmed the upcoming Budget will extend these programs to January 31, 2021, and March 28, 2021, respectively.

“Under the grand scheme of government support, Federal and State governments have provided a huge amount of support by underwriting the cost of flights.
This support is critical over the next 12 months,” says Steve. “The survival of REX and other regional airlines has been aided by external money, and ongoing support is critical.
If the airlines go, it will decimate regional communities.

“In Cairns, we’re as far away from Brisbane as Brisbane is to Melbourne. We are impressed with and appreciative to the government for their actions to date.”

REX recently announced that it had committed to Cairns and air connectivity with the procurement lease of six Boeing 737-800 NG aircraft. The first 737 will be delivered on 1 November 2020 with the remaining five aircraft being phased in over the following four months in readiness for the launch of Rex’s domestic jet operations in March next year.

“Cairns was built on entrepreneurialism. Building the Cairns International airport in the ‘80s was one of the most far-sighted activities at the time. I’d like to think some positive thinking, entrepreneurialism and lateral thinking will see us out of this pandemic.”

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