Rex Airlines this week told how it would scrap its flights in and out of Kangaroo Island at the end of next month, blaming "aggressive" moves by its competitor airline Qantas.
Rex's Deputy Chairman, John Sharp, said the rival had been able to cover its losses during COVID-19 as the number of people flying dwindled thanks only to federal government intervention. "Qantas has clearly embarked on a deliberate strategy of moving into Rex's routes that can only support one regional carrier ... hoping that Rex would be a less formidable competitor in the domestic market," he said.
"Qantas is making record losses during COVID-19 and has received an estimated $1.2 billion in Commonwealth assistance to stay solvent but, despite this, feels it is appropriate to use taxpayers' funds to finance the losses on new services."
Currently Rex Airlines flights from Adelaide to Kangaroo Island operate twice weekly, in and out on Tuesdays and Thursdays.
In response, QantasLink CEO John Gissing said Rex Airline is receiving millions of dollars in "bespoke government assistance", and hinted at opportunities for Qantas to increase some regional services.
"This is a classic Rex tantrum," Mr Gissing said.
"Rex's idea of competition is that it's something that happens to other people, because they believe they have an enshrined right to be the only carrier on some regional routes."
"We'll be reviewing our network to consider whether we can offer services on any of the routes that Rex is threatening to pull out of."
Meanwhile, the only other airline in operation in the region, Qantas, departs only twice a week Monday and Friday only one flight a day in and out.
Last year, Rex Airlines announced it would be pulling its service from Kangaroo Island unless it received funding from the State or Federal Government, and later signed a funding agreement under the COVID-19 regional airline network support program.
The Opposition has called on the State Government to intervene to do all it can to save this important route, to sure-up the Island's future tourism prospects, and continue to provide a vital service to KI residents.
Member for Mawson Leon Bignell said the Island had gone from 50 flights a week in 2017 to just four.
"This isn't just a blow to tourism on Kangaroo Island, it has a massive effect on the residents who have to get off the island to get to medical appointments, or see specialists who relied on the flights to get to the Island," he said.
"Rex Airlines gave notice almost a year ago that it planned on pulling out of Kangaroo Island then, with Federal Government subsidies, it decided to stay on the KI route."
"During that time, Mr Marshall, as Tourism Minister, should have been fighting day in and out to make sure Rex stayed the distance on the Adelaide to Kingscote route."
Treasurer Rob Lucas said the State and Federal Government have provided significant financial support to regional airlines over the past year to ensure at least some services for communities in major regional centres.
"Taxpayers continue to provide financial support to regional airlines, Rex and Qantas, to ensure there's at least one carrier operating in major regional centres," said Mr Lucas.
"Since May last year, the State Government has provided assistance to Rex Airlines for their Mount Gambier and Coober Pedy route (this support will continue until late next month), while I'm advised the Federal Government has been supporting both Rex Airlines and Qantas with flights to Port Lincoln, Whyalla and Kingscote as well as Rex flights to Mt Gambier, Coober Pedy and Ceduna.
"While Qantas is still providing some services to Kangaroo Island, we would obviously welcome competition between multiple airlines in regional centres. However, in the current COVID-impacted aviation climate that is clearly not possible and is sadly the result of the competitive world that we're in.
"The Government will continue to work towards its policy goal of having at least one airline servicing major regional centres and, we would encourage Qantas to consider - in light of Rex's intended decision - whether or not they are in a position to increase their flight capacity to Kangaroo Island."