Regional Express (Rex) looks set to begin operations in Western Australia in 2016 after being named as the preferred tenderer for two WA government-regulated routes – Perth-Esperance and Perth-Albany.
“Subject to final negotiations, Rex will enter into a contract with the Department of Transport to operate the routes for the next five-year licence period commencing 28 February 2016,” Rex said in a statement to the Australian Securities Exchange on Friday.
“Rex will release further information only when the contract is finalised.”
Currently, Virgin Australia Regional Airlines (VARA) serves Albany and Esperance with 46-seat Fokker 50s. However, the company did not bid to continue those flights in the current tender and planned to dispose of its fleet of eight Fokker 50s.
VARA’s last flights to Albany and Esperance will be on February 27 2016, when its current contract with the WA government ends.
Virgin Australia chief executive John Borghetti said those flights were losing money.
“The losses, frankly were just too big,” Borghetti told reporters during a media tour of Virgin’s new home at Perth Airport’s Terminal 1 Domestic Pier on Friday.
“We just couldn’t find a way to make it work.”
State Minister for Transport Dean Nalder said Rex had indicated it would increase flight frequencies and seat capacity on both the Perth-Albany and Perth-Esperance routes, compared with the existing service.
“The airline’s substantial experience, customer service and efficient transport operations are highly regarded,” Nalder said in a statement.
The Minister’s statement said the Department of Transport was “still exploring options with the industry on the Perth-Carnarvon-Monkey Mia, Perth-Derby and the northern Goldfields air routes”.
“An announcement about these routes is expected soon,” the statement said.
