iscover
Rex will “stay in its lane” and not try again to compete with Qantas and Virgin on domestic jet services, new owner Air T has indicated.
Speaking to Airfinance Global this month, Nick Swenson, chief executive at the US-based aviation firm, said that Air T will focus on stabilising the ship and does not plan to drastically overhaul the regional carrier’s business model following the approval by creditors of its $170 million takeover bid.
This content is available exclusively to Australian Aviation members.
A monthly membership is only $5.99 or save with our annual plans.
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
Air T has said it will invest $50 million into recapitalising the business, including increasing the number of Saabs in service from around 31 to 44 by mid-2027.
“The employees and customers want regularity and low drama. Air T will focus on supporting them. That’s what Rex and their customers want. They just need a boost of positivity,” said Swenson.
“We don’t want a competitive response from anyone. We are okay as the distant third behind Qantas and Virgin Australia, upholding the longstanding reputation for serving regional Australia well, as the Rex motto goes, ‘Our heart is in the country’.”
Air T operates 15 different aviation business lines, including commercial jet engines, air cargo transport, and sales of ground equipment. While Rex would branch out somewhat from its existing operations, Swenson said the buyout is “consistent with Air T’s investment thesis”.
“In today’s tight market for aircraft, liquidating Rex would have presented a lot of risk to regional connectivity in Australia,” he said.
“Rex was looking for a long-term and reliable aviation partner. Air T is a permanent capital vehicle with a long-term horizon and decades of experience supplying parts to the global Saab 340 fleet.”
Significantly, according to Swenson, Air T also intends to keep Rex’s current management team in place, as it has been during the administration process.
“We knew they were solid and professional, and they are staying in place. We are focused on bringing back ‘classic Rex’,” he said.
“The management team buckled down and guided the company through the crisis. They are the unsung heroes of the story.”
Operational control and legal ownership of Rex are expected to be transferred by the middle of December, while the federal government is planning to offer support for the deal.
In a restructuring of Rex’s debts, $90 million owed to the government will be carried forward in a profit-sharing arrangement, while another $60 million loan will be extended to help with engine care and maintenance in bringing more Saab 340Bs back into service.
“In exchange for this financing and to ensure value for taxpayer money, Air T has agreed to a range of commitments aimed at preserving essential regional aviation connectivity and improving governance arrangements,” Transport Minister Catherine King said earlier this month.
“This will include returning more aircraft to service and increasing the frequency of profitable flights across the Rex network.
“To safeguard this public investment, the Government will retain its security over all Rex’s aircraft and simulator. This will ensure Rex’s Saab fleet cannot be sold without the Government’s permission and will continue to service communities across regional and remote Australia.”
The government is also setting up a new relief program, capped at $5 million, for regional and remote airports that “supported Rex through the administration process”, which are owed between $45,000 and $650,000.
