Regional Aviation Association of Australia, CEO, Rob Walker Barker at the CAPA Airline Leader Summit Australia Pacific 2025

Transcript

Rob Walker:Yeah, the Australian Aviation White Paper's been a really interesting process to be involved in. There was obviously a lot of expectation around exactly what it was going to look like and what it was going to mean, because we haven't actually seen one of these things since back in 2009, when, if you've ever seen the original document, there's a photograph of a very young Anthony Albanese, who was the Minister at the time. So there was a lot of anticipation, a lot of expectation. I think there's some of the 56 initiatives, there's some pluses there. I think there's also a degree of business as usual that not so much no surprises, but there was, I suppose, a level of understanding that we might have seen a little bit more than we actually got. So from a regional aviation perspective, we do get called out. There is a mention of regional aviation, and some of the initiatives relate directly to that, particularly around the Productivity Commission being tasked to do a review into regional airfares, which we are prepared to embrace and welcome openly because the cost challenges for a regional operator are no different from a large airline. The difference is the scale of the size of the operation and the ability to be able to charge a fair price to recover that cost of capital. If you've got filling 737s or A320s with lots of passengers on a large network, you've got plenty more options to smooth and to, I suppose, you know, move some of that cost base around. But if you're a single-point operator in the Northern Territory or in western, northwestern New South Wales or Western Australia, Yeah. Using a smaller aircraft that might only be a 15 or 19-seat aircraft, the options aren't really there. So the other observation around the Aviation White Paper is, and what we'd hope to see more of, was greater support or government thinking around the policy positions going forward, particularly in emerging technologies and fleet replacement. Because aged aircraft fleets is a challenge. There are no, technically no new regional aircraft on the drawing board that we're not aware of. There are some interesting ones coming with Textron, with the Skycatcher, and a few others like that. But the challenge is around what do we do with the fleet we've got and how do we re-embrace some of the new technologies that are emerging? So a lot of discussion here at the CAPA Summit around SAF and renewables and those sorts of sustainability issues for aviation and the carbon footprint that we create. But SAF is only part of the solution from a regional aviation perspective. Larger members that are doing narrow-body jets, yes, that's a real benefit going forward. The distribution network will be the challenge. I'm sure Sydney, Melbourne, Brisbane, the East Coast, the Eastern Seaboard airports will have the required amount of staff when they— when we actually have a business and a network up and running here in Australia. But smaller ports, and I'm not saying this is a small port by any stretch, But getting SAF in Mount Isa or getting SAF in the Northern Territory is going to be a completely different proposition. And linked to that, there are some emerging technologies, hydrogen-electric aircraft. We have RAAA members that are not just playing in that space, they are at the point of doing some fly testing of the new technologies, being able to use hydrogen to regenerate electrical current to run electrical engines. On existing airframes like the Beech 1900, like the King Airs, like the Cessna 208s. That stuff's here now. And the— it's not that everyone's looking for a handout, but I think a government perspective needs to be how do we also embrace these emerging technologies and ensure that the development of them remains onshore here in Australia, which means jobs in the industry. But also the opportunity to maintain the staged aircraft fleet we have going forward is also available. RIX has been a really interesting proposition, and the fact they've been in administration for just on 12 months now, I think a lot of people thought that the future for RIX would have been resolved, probably not necessarily more quickly, but a bit more definitively. I think the The challenge with Rex and the sale of Rex fundamentally comes down to one word, and that's fleet. They have a viable regional business that can continue to be a viable regional business and have the appropriate levels of profitability if they had a fleet of aircraft that was probably more sustainable going forward. And that's not being, you know, saying something negative about Rex. That's just the reality of regional aviation. The Saab 340 has been their aircraft of choice, as it has for others. But the supply chain to maintain those aircraft and keep that airline moving going forward is extremely challenging. I think what the government has done is interesting. What, from a regional aviation perspective, we very much welcome the support the government is providing to regional aviation. And when I say providing support, it's this recognition of how important regional aviation is, how important regional connectivity is, and importantly, the regional and remote communities that rely on these services for a lot of things that, you know, us city folk, for want of a better way of describing us, take for granted. Getting to medical appointments, getting to specialist appointments, receiving spare parts for your ute or your car or your combine harvester, you know, receiving family and friends to go interstate, come and visit you or to, you know, head overseas, connect through another major Australian airport to enjoy an overseas holiday. So that support from government is welcomed and that is understood. I think the challenge is, is that the government needs to be careful that we don't distort the market. And that is very much around— they've invested heavily in the airline through administration to ensure that it continues to operate. Which is great, but the way things are stacking up at the moment, the amount of investment is significant. We're already up to about $160 million, and with the degree of nervousness that a few people have around the process going forward is that there's been another 6-month extension. What happens then? What if there isn't a buyer that's obvious? Does the government continue on the path that they're on? Because effectively they've already bought the airline. They are the major creditor. They have bought the significant amount of the debt that's there. What are the alternatives going forward for government? And as I say, not distorting a market where other operators that are out there running under their own steam without that level of support, still wanting to be able to provide services. I know for a fact that of the RAAA membership, very few would be able to compete against a government-owned regional airline.

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