iscover
Logistics firm Toll is reportedly close to buying Rex’s aeromedical arm Pel-Air.
According to anonymous sources cited in The Australian Financial Review, the company – owned by Japan Post – is expected to sign a deal in the coming days after reaching an agreement on terms.
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
Though Rex remains in administration, Pel-Air, which is a profitable business with contracts for air ambulance services in Victoria and NSW, is outside the administration and continues to operate normally, as does Rex’s FIFO and charter subsidiary National Jet Express.
Pel-Air earlier this year commenced a new $300 million 12-year Ambulance Victoria contract signed in 2022 to continue to supply aeromedical services using four Beechcraft King Air aircraft plus pilots and engineers.
The aeromedical provider came under scrutiny in February over several pressurisation failures on Ambulance Victoria services, which it denied were the result of pilot fatigue.
Rex administrator EY Australia has been working to keep the airline afloat as it attempts to secure a sale. A source late last month claimed “no obvious buyer” had emerged for Rex’s regional services, which have kept flying despite the demise of the airline’s domestic jet arm.
The unnamed source told The Australian that interested parties had looked at picking up Pel-Air, as well as the Rex flight training academy.
“Rex has always been a bit of a Frankenstein business that was put together, so it was somewhat inevitable the business would be broken up,” they said.
The federal government in August stepped in to guarantee regional Rex flights and safeguard its slots at Sydney Airport while the administrator searched for a buyer, with Transport Minister Catherine King indicating that the government does not want the airline to fail.
“Rex operates one of Australia’s largest regional air networks and provides essential connectivity to move people and critical freight on 41 routes to regional and remote communities, including 21 routes that are only serviced by Rex,” Minister King said in August.
“Rex’s continuation is in the best interests of Australia – and the Government is working closely with the administrators to ensure a strong regional aviation presence now and into the future.”
A poll conducted by YouGov for the Transport Workers’ Union earlier this month found three in four Australians surveyed would be inclined to support the government taking an equity stake in Rex, which would likely require fleet upgrades from any potential new buyer.
The airline currently has a fleet of around 57 Saab 340Bs with an average age of 30.2 years. Thirty-four of these are in active service and the rest are parked. The administrator in September confirmed that six operational Saab 340s flying active routes were pulled from sale after being listed before the administration.
Rex administrator EY Australia has been contacted for comment.
