Rex announces impending stand-downs ahead of anticipated $18m loss

Rex has revealed that it will introduce “temporary stand-downs” of staff later this week as its full-year loss for 2021 was revised down from $15 million to $18 million.

It’s rumoured that hundreds of staff across the airline’s network could be affected, with the employees supporting Rex’s new Boeing 737 operations expected to be hit the hardest.

In an announcement posted to the ASX on Tuesday, Rex said that ongoing lockdowns and border closures across Australia’s most populous states of NSW and Victoria had “significantly impacted revenue”.

The airline added that “no measures were taken initially to mitigate the losses as the lockdown [in NSW] was perceived as temporary and of short duration”.

The news comes just days after Rex criticised rival Qantas for announcing it would stand down 2,500 staff across its Qantas and Jetstar brands, with Rex deputy chairman John Sharp calling the decision “premature”.

Qantas made its announcement just one day after Deputy Prime Minister Barnaby Joyce introduced the federal government’s new Retaining Domestic Airline Capability scheme, which would see airline staff outside of COVID lockdown hotspots gain access to JobKeeper-style payments of $750 per week.

Previously, stood-down workers in aviation could only gain access to financial support if they live in areas that are locked down, through the government’s general COVID-19 Disaster Payment scheme.

Despite earlier confusion on who is entitled to payments under the new scheme, the Deputy Prime Minister’s office later confirmed that any frontline staff employed by an airline are eligible”, including all airport or ground workers employed by an airline, however, subcontractors are not eligible.

Rex said it would confirm how many staff are to be stood down “at the end of the week” following consultations with stakeholders.

Meanwhile, Virgin Australia is expected to similarly announce mass stand-downs across its network with potentially 1,000 employees at risk, also as a result of ongoing lockdowns and border closures across the country.

In a statement, a spokesperson for Virgin said the company was “consulting with unions to manage the reduced demand in flying and the available hours of work over the next 1-2 months”.

Last month, Rex announced it had been forced to “greatly reduce” its regional and domestic services due to state border closures and lockdowns, and that restrictions saw the airline shut down 80 per cent of its business.

“It’s hit us really hard,” said Deputy Chairman Sharp at that time. “It’s devastating to see the impact. It’s really knocked out the vast majority of our business.

“We’ll lose revenue and we’ll have people we’ll have to pay people who we can’t generate income from. We’re back to where we were at the beginning of the COVID pandemic.”

Source: https://australianaviation.com.au/2021/08/rex-announces-impending-stand-downs-ahead-of-anticipated-18m-loss/