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Rex’s administrators have won an extension to their appointment until the middle of next year.
The Federal Court on Thursday granted EY’s application, which will see the firm stay on as administrator for the regional airline until 30 June 2025. The news comes after the federal government aided Rex with $80 million in financing to keep its planes flying.
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The government has propped up the ailing carrier since its administration at the end of July, including by guaranteeing bookings and preserving its slots at Sydney Airport.
Transport Minister Catherine King has welcomed the extension, saying it gives EY “the best possible opportunity” to implement a plan to save Rex.
“Our support for the administrators’ application to the Federal Court for the extension recognises the important role that Rex plays in regional communities across Australia. We are providing up to $80 million to keep Rex’s regional routes running during the administration process,” she said.
“We will also continue to guarantee ticket sales made throughout the voluntary administration to 30 June 2025. The guarantee has been effective so far with bookings holding up, and has not been called on as Rex continues to provide services to customers.
“My department continues to meet regularly with the administrators as they work to implement a strategy for the regional aviation business.”
In a statement earlier this month, administrator Sam Freeman said the funding and extension would be used to expand Rex’s fleet and improve the business for sale.
“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,” Freeman said.
“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 government funding has met with criticism from some of Rex’s rivals, with Victoria-based Sharp Airlines calling the move “extremely disappointing” and saying any assistance should be offered to the whole sector to create an “even playing field for all operators”.
Sharp Airlines CEO Alistair Dorward said the move “ignores requests from regional operators across the country for the need for an industry-wide solution”, and that Rex had brought its current situation on itself.
“The management of Rex’s failed ambitions to directly take on Qantas and Virgin on domestic routes has greatly contributed to their current financial situation and their voluntary administration,” he said.
“The $80m windfall, which on the surface appears to have no conditions attached, enables Rex to continue to directly compete with other operators without similar support.
“Currently, three RPT operators provide services from Victoria to King Island, and we are now entering a period where the playing field is grossly distorted.”
EY Australia has been unable to find a buyer for Rex’s regional operations since the collapse in July; however, 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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says:I recognize the dilemma for the Fed. Govt. but in real terms are things going to change for and at REX in the coming 7 plus months and most probably the answer is NO, – the only winner will be E.Y. : most likely the only answer will be to re-equip the current REX fleet but that won’t be achieved under the current management/administration so we are looking at splitting the enterprise into viable units and or a buy out of all but the current airframes by “brand x” The longer the decision making process the less value in the asset. Let’s face it, it is most unlikely that the current Owner/s of Rex want a continuation of the business as the re-capitalization costs would be frightening, we are looking at serious investment here, not just a Visa loan. The Oz. regions need answers, there are no votes in procrastination.