Australia's Rex buys small regional carrier

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Newly listed Australian regional carrier Regional Express (Rex) has acquired small New South Wales-based regional carrier Air Link.

“Under the agreement, all Air Link shares will be transferred to Rex for 100% ownership of Air Link’s activities including its fleet of nine aircraft” – one Raytheon Beechcraft 1900D, five Piper Navajo Chieftains and three Cessna 310s, Rex says in a statement.

Air Link was established in 1971 and is based in the central New South Wales town of Dubbo. It operates to eight destinations and provides scheduled and charter passenger services linking Dubbo and Sydney to small towns in the state.

Rex fails to disclose how much it is paying to buy the airline from Air Link’s owners, David and Barbara Miller. But Rex says David Miller will remain chief executive officer of Air Link and Rex plans to retain the staff and keep the business as a separate entity.

But Air Link will be co-operating with Rex starting with the Dubbo-Sydney route, where the combined might of both will create a seven times daily service in which fares will be “consistent” between both carriers.

Rex’s managing director Geoff Breust says: “There are many synergies between the two airlines which we can use to benefit both companies. We can now join together to provide services covering both networks as well as using our combined resources to further build regular services.”

Miller at Air Link says in the statement: “Immediately we will be able to offer additional schedule options and gain benefits of combined activities at airports and in the reservation systems.”

He adds the relationship with Rex is a throw “back to the days before the [2001] collapse of Ansett Australia when Air Link operated a successful partnership with regional airline Hazelton Airlines”.

Hazelton was part of Ansett Australia group but when Ansett collapsed Hazelton and another Ansett regional carrier, Kendell Airlines, were sold and later merged to create Rex.

Rex raised A$35 million ($26 million) when it listed on the Australian stock exchange on 9 November following an initial public offering that valued the business at A$115 million.

It is Australia’s largest regional airline and the country’s third largest passenger carrier with a fleet of 29 aircraft, mostly Saab 340s and a few Fairchild Metros, operating on 33 routes.

The Air Link acquisition comes after Rex recently bought a 50% stake in Sydney-based regional carrier Pel-Air, which operates cargo services as well as passenger charters.