Rex Airlines Cuts Tasmania Routes and Mildura Flights Amid Rising Fuel Costs

Rex Airlines has moved to tighten its regional network in Victoria and Tasmania, cutting two Tasmanian services and reducing flights to Mildura as higher fuel costs, inflation and softer demand continue to reshape regional aviation in Australia.

The airline will end its Melbourne-to-Devonport service from June 20. It will also stop operating the King Island-to-Burnie route from the same date. From June 22, Rex will reduce its Melbourne-to-Mildura schedule from 24 weekly return services to 19.

The decision is not a full retreat from Tasmania, but it is a clear sign that Rex is prioritising routes it believes can operate more efficiently. Under the revised network, the airline will run 18 return services a week between Melbourne and Burnie, along with seven direct return services a week between Melbourne and King Island.

According to ABC News, Rex said the restructure was linked to a volatile operating environment, with sustained high fuel costs, inflation and weaker demand among the factors behind the changes.

The sharpest local impact will be felt in Devonport. Rex began flying from Devonport Airport in August 2022 and has since handled about 15 per cent of passenger movements at the airport. Once Rex exits the route, QantasLink will become the only regular passenger transport airline operating from Devonport to Melbourne.

That matters for passengers because airline competition on regional routes can influence both choice and pricing. When one carrier leaves a market, travellers often have fewer departure times to choose from and less flexibility when planning business, medical or family travel.

TasPorts general manager Allan Gray said Rex’s decision would be disappointing for passengers who value choice, but noted that QantasLink would continue to operate between Devonport and Melbourne. He also said airline network decisions are commercial decisions for carriers.

In Mildura, the reduction is smaller than the Tasmanian route closures, but still important. The city relies heavily on air links because of its distance from Melbourne and its role as a major centre for the Sunraysia region. Mildura Airport chief executive Andrew Elliott said patronage remained strong, though some flights still had empty seats.

Mr Elliott said airlines were likely becoming less willing to accept weaker load factors because aircraft now need to be used more efficiently. He also pointed to the pressure created by fuel prices, saying fuel generally makes up about a third of airline business costs and becomes extremely difficult to manage when that cost doubles.

Federal Member for Mallee Anne Webster said any reduction in services at Mildura Airport was disappointing, describing Mildura as Victoria’s largest regional airport and the most isolated city in the state. She said she would continue speaking with airlines about improving service offerings and called for better scheduling between Qantas and Rex to give Sunraysia residents more choice.

The broader issue is not limited to Rex. Airlines across Australia have been reassessing capacity as fuel volatility raises the cost of keeping aircraft in the air. Swikblog recently covered similar pressure on the aviation sector in its report on Qantas cutting domestic flights as fuel costs surged.

For Rex, the latest changes appear to be about protecting the strongest parts of its regional network while removing or reducing services that are more exposed to cost pressure. Regional routes are often more vulnerable because passenger volumes are lower, aircraft are smaller and there is less room to absorb a sudden rise in operating expenses.

For communities such as Devonport, King Island, Burnie and Mildura, the concern is practical. Fewer flights can affect tourism, business movement, healthcare travel and family connections. In regional Australia, aviation is not just about convenience; it is often part of the basic transport network that keeps isolated communities connected.

Rex’s restructure may improve its operating efficiency, but it also shows how fragile regional air services can become when fuel prices rise and demand softens. The immediate result is a leaner network for the airline, but for passengers in affected regions, it means fewer choices and a renewed focus on whether Australia’s regional aviation system can remain both reliable and affordable.

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