REGIONAL Express (Rex) will cease services between Armidale and Sydney from July 2 following a reported loss of almost $1 million in less than two years.
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Rex set off a passenger pricing war in September 2004 when they entered the Armidale market as a cheaper alternative to Qantaslink but has since accumulated losses of $915,000.
Rex managing director Geoff Breust cited lack of demand as the driving force behind the decision to cut the carrier's 18 return services each week.
"There is no doubt Rex entering the market almost two years ago was the catalyst for cheaper fares and more people using air services to the city," he said.
"Unfortunately, the route is too thin to allow two carriers of quality to service it effectively.
Armidale Dumaresq Council general manager Shane Burns
was disappointed with the announcement.
"Air travel numbers grew from 60,000 before Rex to 90,000 because more people could afford to fly," he said.
"The airline encouraged Armidale's mums, dads and families to use air services but failed to get a greater part of the state contract market who tended to stay with Qantaslink.
"So from a community viewpoint it's disappointing but I respect they have made a profit-driven decision."
Member for Northern Tablelands Richard Torbay said the Rex public float had put the decision in the hands of shareholders.
"Rex obviously wants to retire from its price war with Qantas and operate somewhere else where it can raise its fares," he said.
"It's not a good scenario for passengers in Armidale as fares will inevitably rise again and force people out of air travel."
At Armidale Airport yesterday frequent flier Daniel Leroy was shocked to hear the news.
"I love the convenience and cheap cost of flying with Rex. Their closure will affect ordinary people a lot more than the business community because they can claim all their flights back," he said.
Mr Burns said the undesirable monopoly of air services would be promptly addressed.
"We will be involved in future talks with Qantaslink in relation to the monopolistic situation in an attempt to keep competitive prices," he said.
Mr Breust said there would be no job losses as a result of the
decision.
"New England Travel were contracted to carry out ground arrangements additional to their normal activities so they will continue with their normal jobs," he said.
"Rex aircraft and crew resources will be redirected to the rest of the Rex network."
He didn't rule out future Rex services in Armidale.
"We would be keen to consider returning as the conditions were right; it has been fantastic to come here."
