Government injects $80m to keep Rex flying

The move is another indication that the government does not want Rex to fail, having moved to prop up the ailing carrier since its administration at the end of July, including by guaranteeing bookings and preserving its slots at Sydney Airport.

“The financing will support the business to continue offering critical services for regional communities,” Transport Minister Catherine King said.

“The Government has agreed to grant early access to former employees of Rex Airlines Pty Ltd (RAL), which operated the intercity jet services, to the Fair Entitlements Guarantee (FEG) while RAL is in voluntary administration. This will ensure that extending the Voluntary Administration period does not delay the ability of these employees to access their entitlements.

“In addition, Rex’s administrators and main secured creditor PAG have advised they will pay the entitlements of former employees of the regional business who have been made redundant during the Voluntary Administration period.

“The Government will also continue to guarantee ticket sales made throughout the Voluntary Administration to 30 June 2025, should the Federal Court agree to the extension application. The guarantee has been effective so far, and has yet to be used with flight bookings holding up well.”

EY Australia has been unable to find a buyer for Rex’s regional operations, though it has sold aeromedical division Pel-Air to Japan-owned Toll Aviation and is reportedly looking to sell Rex’s flight school in Wagga Wagga.

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Administrator Sam Freeman said EY would use the financing and potential extension to embark on a business improvement program, including a fleet expansion.

“The extension we are requesting will help us to build a strong network for regional Australia, enabling us to continue to operate the regional network while undertaking a business improvement plan to reposition the business for sale,” he said.

“We’re planning to increase the size of the operational fleet while providing greater clarity for the Rex team and investing in strategic growth initiatives. Through this plan, we’re looking to increase reliability and capacity on the regional routes.

“An extension will not disrupt the continued operation of the regional network, which is such a critical part of regional and rural Australia’s connectivity. The actions to be undertaken in the extension period are expected to enhance the network.”

The Transport Workers’ Union has welcomed the funding announcement and again called for the government to take a stake in Rex, with national assistant secretary Emily McMillan pointing to a poll last month saying the move would have the support of around three in four Australians.

“The efforts of the Federal Government to deliver these entitlements for workers, who’ve waited months for answers, will be a huge relief heading into Christmas,” she said.

“In October polling showed there is overwhelming support in Australia for the Federal Government to intervene and keep Rex flying. There are hundreds of jobs still on the line and there is a clear mandate here for the government to step in and safeguard critical aviation routes and protect those jobs by taking a stake in the airline.

“We need to see this intervention followed up by a long-term solution for regional travel. The insatiable profit focus of privatised airlines and airports is failing regional Australia and aviation workers. A Safe and Secure Skies Commission would ensure stability for the industry and give certainty to workers, businesses and regional communities.”