One of the industries that’s done it toughest throughout the COVID-19 pandemic is the airlines.

Travel bans and consumer sentiment have forced airlines to stand down staff and ground the majority of its planes. Even large cap Qantas (ASX:QAN) has completely halted its international operations for two months.

But while Australia’s flag carrier has nearly $3bn in cash, following a debt finance deal secured last week, our regional airlines — including Regional Express (ASX:REX) — warned they were on the brink of extinction.

But the regional players have now been given some breathing room thanks to a government package announced on Saturday.

A total of $298m will go to regional airlines. Of this, $198m will ensure its existing network is retailed and the remainder will supplement their immediate cash flow to prevent them from falling into administration.

Regional Express welcomed the package.

“This meaningful assistance package not only seeks to keep essential air services going, but also tries to prevent the existing regional aviation providers from collapsing,” Regional Express deputy chairman John Sharp said.

“All regional communities and residents should be extremely grateful to the Coalition government for its commitment to the future of regional cities”.

Regional Express shareholders also appeared grateful for the package, sending shares up over 20 per cent in early trade.


While the company will still be culling the majority of its flights, it will be reinstating some routes and calling off 30 to 40 per cent of planned stand downs.


FIFO and charter flights are safe, for now

The other aviation small cap on the ASX, Alliance Aviation (ASX:AQZ), updated its shareholders last week. Alliance is primarily a fly in, fly out (FIFO) and charter operator and these services are likely to continue.

However, it has cancelled passengers services under a wet lease agreement with Virgin Australia (ASX:VAH) after Virgin revealed it was substantially cutting its network until mid-June.

Alliance promised to provide a further update to shareholders this week. It said it was awaiting on clarification about the state and federal government’s non-essential travel requirements.