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Rex’s administrator has said it wants to see the airline sold within five weeks.
The Australian has reported Sam Freeman, a partner at administrator EY Australia, saying Rex’s 737 fleet is “permanently grounded” and that EY is looking to present sale options to creditors within 25 working days. Asian investor PAG is believed to be in the mix.
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“It’s very much our intention not to have a prolonged administration period,” Freeman said.
According to Freeman, a reduction in Saab 340 regional operations, coupled with low passenger numbers on its domestic jet routes, contributed to the airline’s financial failure; there is speculation the airline was around $350 million in the red, though EY has not released official numbers.
Rex last year slashed regional services across eastern Australia, citing parts and labour shortages for its Saab 340 fleet. The cuts were expected to end in March this year, but were extended until October.
Despite its troubles, Freeman dismissed the idea that Rex was “a Bonza operation”.
“Bonza was not operating a regional network that Rex is around Australia, so I don’t think the two operations are comparable,” he said.
Around 610 jobs are expected to go at Rex as the administrators shutter its domestic jet operations, including 360 domestic and 250 regional positions. EY has reportedly secured a loan to keep the regional operations in the air, with the federal government also offering a hand.
Speaking to ABC Radio National on Wednesday morning, Transport Minister Catherine King said the airline is “incredibly important” for regional travel but stressed that the government can’t step in and save Rex “at any cost”.
“They asked for some assistance to ensure that their operations can continue into the airports. So I called all of the airports, the major airports.
“They wanted to also make sure they could still access fuel supply and ground handling and those sorts of things. We helped facilitate some of that yesterday, and my department was working through that as well.
“They will come to us with specific asks. We will need to look at those in detail. I think it is fair to say that we would be reluctant to just throw money at the problem. What we would want to do is ensure that there is a long-term solution to the security of regional aviation, and we will take time to work our way through that.”
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says:Much will be written over the coming weeks pointing the finger at various unqualified views as to the demise of part of REX and I will leave folks to digest their own observations. There is only one reason that can be unquestionably attributable to the cause; that is “Expenditure was far in excess of Income”, nothing else, don’t blame the commercial behaviors of other! Tragically though, is there any money left in the bank to pay for the much-needed maintenance required to reintroduce their mostly grounded fleet of 340’s??????