History shows the path to getting a regional airline off the ground in Queensland is a turbulent one and few succeed in turning a profit in the long-term.

Rex Airlines announced it was going into voluntary administration last week, but dozens of regional carriers have folded before it.

In the late 1980s, in the tiny town of McKinlay, 1,600 kilometres north-west of Brisbane, Peter Collings saw a future in regional aviation.

“We had a four-seat Cessna 182 Skylane plane sitting there, by 1992 launched charter operations under the MacAir banner,” he said.

“It was only unregulated routes to begin with.

“We picked up the contract from mine sites back to the coast.

“We would go to Mount Isa, Cloncurry, Brisbane and Townsville.”

Mr Collings’s business flourished and he grew his fleet to include about 30 Saab 340s — the same aircraft used by Rex.

“After Flight West went broke in 2001, we ended up picking up those regulated routes,” he said.

Since at least 1987 the Queensland government has contracted airlines to operate along subsidised routes across the state in order to provide most regional and remote communities with access to essential services.

In the 2022/23 financial year, the state government spent $12 million subsidising regulated air services operated by Rex.

History of going bust

Before Rex began trading, the government-subsidised routes operating in north-west Queensland and the Gulf were operated by Skytrans, which took over from MacAir in 2009 when it went into receivership.

Flight West had operated on some of those routes since 1987.

Despite the rocky track record, Skytrans chief executive Alan Milne said there was a possibility Rex was not doomed.

“Voluntary administration doesn’t mean that an airline will be shut down,” he said.

In 2015 Skytrans was placed in administration after losing the Queensland government-regulated route contract to Rex.

Two months later, the operator returned to the skies.

Mr Milne said the story of his company highlighted the grit needed to survive as a small airline.

“[Rex] are our competitors, but we’re a part of the same industry,” he said.

“Off the back of the failure of Bonza, we don’t want to see another one go down so quickly.”

He said the problem with Australia’s aviation industry was the country’s small population.

“It’s not like a continental USA — we just don’t have the movements,” he said.

“There needs to be a sweet spot of how many providers we have.

“I don’t know what that looks like, but I don’t think it’s three big airlines competing head to head on the golden triangle [Brisbane, Sydney, Melbourne] route.”

Health, work concerns

In the remote Gulf of Carpentaria, which is only serviced by Rex, news of the airline going into administration has reignited fears about the the ramifications for healthcare and industry.

Carpentaria Shire Mayor Jack Bawden lives in Normanton, a 10-hour drive to Townsville.

“Nurses, doctors — they all fly-in, fly-out,” he said.

“There would be a big hole and I’d be very concerned about the health outcomes if we did lose the service.

“I want to see Rex maintained, but my worry is it could be pulled out from under us, which would leave a big hole in all of Western Queensland.”

Seven hundred kilometres away in Hughenden, Flinders Shire Mayor Kate Peddle is worried about losing air access while trying to deliver the $5-billion CopperString 2032 project alongside the state government.

“We shouldn’t be regressing on our services offered, we should be punching forward,” she said.

“One of our top priorities had been the expansion of the airport and investing in that.

What’s the solution?

Mr Collings said it would be a lot tougher to try and start up a bush airline now than it was 25 years ago.

“It’s certainly possible to run a profitable smaller regional airline right now, but you have to weigh up all those costs and variations and transfer that to the tickets,” he said.

Mr Collings said any operator would struggle to break even unless conditions changed.

“It’s a matter of axing the routes that aren’t worth heading in to, and if they’re integral for medical reasons then the government needs to step in,” he said.

In a statement, Queensland Transport and Main Roads Minister Bart Mellish said airlines remained the responsibility of the federal government.

“Transport and Main Roads will continue to monitor developments and impacts,” he said.

“Regional Queensland remains our priority.”