Rex Airlines - Case Update

The Australian government has agreed to provide up to $80 million of financing to keep Rex’s regional routes running during an extension to the voluntary administration process.

Certain entities within the Rex Airlines Group, which provides passenger and freight airline services in Australia, entered voluntary administration on 31 July after a post-pandemic consumer reluctance to fly caused the company to discount its rates, which ultimately descended into a price war with other airlines.

Since their appointment, administrators Samuel Freeman, Adam Nikitins and Justin Walsh of EY have continued to trade the Rex Group’s business, other than certain metropolitan routes which have been discontinued. The administrators have done significant work since their appointment, locating potential creditors, selling the Pel-Air ambulance business in addition to certain other non-core assets, moving to sell the Wagga Wagga flight school and making necessary headcount reductions.

The administrators have also been working closely with the government to ensure Rex’s continuation. In August, the government agreed to guarantee all flight bookings for four weeks to encourage passengers to continue booking with Rex. At the time, Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King stressed how vital Rex is to Australian passengers, providing 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.

Now, Rex has announced that the government has agreed to provide financing of up to $80 million to keep Rex’s regional routes running during a proposed extension of the voluntary administration process to 30 June 2025. The announcement can be accessed here.