THE airline industry is again in the news with one of its major players, Virgin, deciding to cease their Adelaide to Darwin service due to dwindling numbers.

Of course, there were screams of foul play by authorities in Adelaide and Darwin, neither of whom wanted to see a reduction of air services for their cities.

These reactions fly in the face of the reality – which is that airlines are businesses and they need profitability to survive in their tricky game.

When we look at the operational issues facing REX Airline, it is possible to see what needs to be done in order to get their operation back on track, to survive in the longer term, and to deliver service to regional areas.

It has been my lot in life to be invited onto the boards of some eight public companies that were struggling with the realities of falling profitability, to sort them out by making the hard decisions.

This takes time, however the basic premise is to reduce expenditure and increase income to operate profitably.

It may sound simple enough, but the discipline needed to make this happen is always reacted to in the same way that the authorities are complaining to Virgin Airlines about the cessation of some of their services.

When we look at REX and the routes they service, it becomes arguable that their least profitable routes to some very isolated locations need to be eliminated or heavily reduced.

Maybe they could even be incorporated into a circular route serving more than one destination, involving a less regular service to that particular location whilst still maintaining a service.

Putting humpy dumpty back together again can certainly be achieved by thought, persistence and discipline – thus keeping the service to these regional destinations open and in dependable hands.

Whilst these issues are no doubt being considered by the administrators, the overall debt and cash flow position of REX is unknown to those outside the circle and will be critical for its survival.

By John BLACKBOURN