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The federal government has said it may step in to purchase Rex if a commercial buyer is not found for the collapsed airline.
The announcement on Tuesday night, which comes after $80 million in funding and the purchase of $50 million in Rex debt from financier PAG, is the clearest signal yet that the airline could become the first to be owned by an Australian government since Qantas was privatised in the 1990s.
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In a statement, the government said it still wants to see the airline sold and will work with administrator EY Australia and potential buyers to determine the level of support it can offer.
“Terms of Commonwealth support will be subject to negotiation, but will be conditional on commitments by bidders to provide an ongoing, reasonable level of service to regional and remote communities, the need to provide value for money to taxpayers and good governance,” it said.
“The government is not a bidder in the upcoming sale process and would like to see a successful market-led outcome.
“However, in the event there is no sale, the Albanese government will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations necessary for potential Commonwealth acquisition.”
The move to buy out Rex’s debt was criticised by other regional carriers, which had signalled they could move in to replace its services should it enter liquidation; however, the TWU has hailed the government’s continued support and potential nationalisation, with national secretary Michael Kaine calling it “a huge moment for the aviation industry”.
“It means certainty for workers, for businesses, for everyone relying on these critical routes for essential healthcare appointments and to stay connected with family and community,” he said.
“This is a vital step towards a future where aviation actually works for the people of this country, not its overpaid executives. It is hugely promising to see the Federal Government investing in the future of regional Australia and the aviation industry, and making sure that Rex can keep flying its critical routes long-term.
“Workers and passengers are sick to death of airline and airport executives cashing in bonuses while they’re not sure if they’ll have a job or if their flight will get off the ground.
“Today’s announcement is a glimmer of hope for the future of aviation, after a decade of relentless pursuit of short-term profits that has driven the industry to its darkest point.”
Rex entered voluntary administration at the end of July last year, with estimates it owed around $500 million to 4,800 creditors after its failed venture into competing with Qantas Group and Virgin Australia on domestic jet operations.
The government has since propped up the ailing carrier, including by guaranteeing its regional bookings and preserving its slots at Sydney Airport, but no buyers have thus far emerged.
EY Australia has sold aeromedical division Pel-Air to Japan-owned Toll Aviation and was in November reportedly looking to sell Rex’s flight school in Wagga Wagga.
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says:With the Govt. indicating a possible nationalised outcome, business will back away. The best outcome is to liquidate the now defunct business and let business do their job which will protect jobs and the needed air services. Remember, no change equals no change. The TWU has to increase their field of vision, currently they are too narrow in their view of the total situation.