Rex suspends NSW regional routes as fuel costs weigh on operations

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Rex suspends NSW regional routes

Highlights

Rex will indefinitely suspend its Orange and Port Macquarie services from October 25 due to high fuel prices and low demand, offering refunds or re-bookings.
The move follows Rex’s late 2025 acquisition by U.S.-based Air T, backed by A$60 million federal support and A$108 million to restructure Commonwealth debt, with Air T committed to maintaining regional service.
Local officials warn of negative impacts on business and tourism connectivity, with Port Macquarie’s A$700 million annual visitor economy at risk and councils pursuing talks with other carriers.

Route suspensions and government-backed commitments

As reported by ABC News, Rex says its Orange and Port Macquarie services will be suspended indefinitely from October 25, with affected passengers to be offered refunds or re-bookings. The airline says entrenched high fuel prices linked to the ongoing conflict in the Middle East, together with lack of demand, mean the routes are not commercially viable at this time.

The carrier says it will keep monitoring costs and could reinstate the services once fuel prices fall to a level that supports profitable operations. The move comes less than a year after Rex was sold to U.S.-based Air T in late 2025 under a deal backed by a A$60 million federal support package and a further A$108 million to restructure Commonwealth debt.

In exchange for that support, Air T committed to maintain service levels to regional Australia, increase the number of aircraft in operation and lift frequencies on profitable parts of the network. A spokesperson for Transport Minister Catherine King says the government views the decision as disappointing for many communities and continues to work with Rex to understand market challenges and monitor compliance with its regional commitments.

Regional economic impact and network pressure

Local officials say the suspensions risk weakening business and tourism connectivity in both centres, even as other airlines continue to serve the routes. The federal government notes travellers in Orange and Port Macquarie can still fly to and from Sydney with alternative carriers.

Independent MP Andrew Gee, whose electorate includes Orange, says the decision is a shock after strong pressure for public support of the airline. Port Macquarie Mayor Adam Roberts says the area's A$700 million annual visitor economy is likely to feel a significant flow-on effect, while discussions are underway over how to limit any impact on airport staff and broader travel access.

Orange Mayor Tony Mileto says he is doubtful the service will return and argues there is still demand in the market, citing operators including Qantas and Link Airways. His council plans to seek talks with competing airlines to help ensure existing services are maintained; earlier this year, Orange City Council also received part of a A$4.8 million Commonwealth allocation to cover Rex's unpaid debts to regional councils.

Our earlier coverage of Middle East-linked oil market disruption explained how renewed risks to Saudi supply and uncertainty around fuel flows were pushing crude prices higher. We noted that geopolitical tensions were keeping traders focused on potential supply shocks and continued volatility in energy prices—factors that can quickly feed through into higher operating costs for fuel-intensive industries.

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