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Toll Aviation has confirmed it will pick up Rex’s aeromedical arm Pel-Air, including its valuable fixed-wing air ambulance contracts, in a $47.1 million deal.
Toll, owned by Japan Post, already operates helicopter air ambulance services for NSW and the ACT, with the confirmation of the previously-rumoured acquisition adding NSW and Victoria’s fixed-wing services to its stable.
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The entire Pel-Air fleet, including eight Beechcraft King Air B200/300 series turboprops and two Pilatus PC-24 jets, will form part of the purchase alongside the contracts.
“This acquisition not only enhances our capabilities, but it also ensures that we can provide an effective response to any aeromedical situation, utilising the right asset for the right job. Our focus on operational excellence will directly benefit patients, communities, and stakeholders,” said Colin Gunn, general manager of Toll Aviation.
“The integration of Pel-Air into Toll Aviation will create synergies that will improve operational efficiency and enhance service delivery. Our clients will benefit from a more extensive oversight and operational support to ensure the communities of NSW, ACT and Victoria have access to critical patient care.”
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.
Rex’s administrator EY Australia told the ASX that the deal is subject to normal approvals, including by the Foreign Investment Review Board.
“Subject to all conditions precedent being satisfied, completion is expected to occur in the last quarter of 2024,” EY said.
“Proceeds from the sale will be used by the Rex Group to repay secured debt.”
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.
EY Australia has been working to keep Rex afloat as it attempts to secure a sale. A source late last month claimed “no obvious buyer” had emerged for the airline’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.
