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Rex buyer Air T has vowed to put the rest of the regional carrier’s Saab 340 fleet back in the air.
The American company, which was confirmed on Tuesday night to be buying Rex, expects to close the acquisition by year’s end pending creditor and other approvals, and has entered into an agreement with the Australian government to restructure the airline’s financing arrangements.
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Rex currently has a fleet of around 57 Saab 340Bs with an average age of over 30 years, which has proven a barrier to its sale. It has been estimated that more than 20 of these aircraft have been out of service for extended periods in recent years.
In a statement on the Nasdaq, Air T said the deal “contemplates a continuation and growth of Rex’s regional airline business and continuing employment for its workforce”.
“Rex plays an essential role in connecting regional Australian communities. Approximately 50 per cent of Rex’s routes are not serviced by any other airline. Air T likes the Rex Saab 340 program and will be funding Rex’s engine renewal program and returning its fleet to service,” it said.
“Air T will work to ensure Rex will continue to operate on a sustainable basis, thereby providing critical services to regional Australians.
“Air T believes it was selected to acquire the company in part because of its long-term investment horizon, experience in regional aircraft, and commitment to stabilising and growing Rex.”
The news of Rex’s buyout has been welcomed by the Transport Workers’ Union, which says it will seek to meet with Air T on matters including employee entitlements.
National secretary Michael Kaine said there are “still significant questions here around jobs and the continuation of services long-term”.
“The Federal Government should be commended for its commitment to acquire Rex if no buyer was found, which ensured breathing space for regional Australia and workers,” Kaine said.
“With a significant portion of the transaction process still to come, this contingency will continue to provide surety that Rex will keep flying, but the Federal Government must ensure it extracts further commitments from Air T on routes and services, and good jobs.
“Regional Australia has been left behind too frequently when it comes to aviation, and now more than ever we need certainty for the future for Rex.
“Air T’s long-term plan for Rex must involve growing these critical services and investing in the airline, which crucially means good jobs for workers.”
According to The Sydney Morning Herald, Air T has access to parts needed for the upkeep of Rex’s Saab fleet, which was in the spotlight recently following two engine malfunctions in the span of less than a week.
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says:The figures will be published soon no doubt but it has already been stated that existing creditors will get zilch. How much will Air T actually pay? How much will EY charge? and the big question, how much will the Oz Govt drop in and finally what will be the dollar value left as operating capital going forward?
I wish them well but crikey, what a mess!