Rex Airlines - Case Update

Samuel Freeman, Adam Nikitins and Justin Walsh of EY have provided an update on their administration of Rex Airlines, sharing news that the Australian Government is now the airline’s largest secured creditor, and advising the market of a second sale process to be facilitated by independent sale advisors Houlihan Lokey.

Certain entities within the Rex Airlines Group entered voluntary administration in late July 2024 after a post-pandemic consumer reluctance to fly caused the airline to discount its rates, which ultimately descended into a price war with other airlines.

The administrators have been able to sell off a number of non-core assets, including the sale of Pel-Air Aviation to Australian freight company the Toll Group, which completed last month. However, a buyer has not yet been found for the regional airline business and other assets of the Rex Group. The Australian Government previously agreed to provide up to $80 million in financing to keep Rex’s regional routes running during the current extension to the voluntary administration process to 30 June 2025.

Now the Government has taken another significant step in an attempt to save Rex, acquiring $50 million in debt from secured creditor PAG to prevent the airline's collapse. The Australian Government is now the principal secured creditor and intends to become a voting member of the Committee of Inspection.

Significantly, the administrators also revealed that a second sale process seeking a buyer for the regional airline business and other assets of the Rex Group will commence in February 2025. Houlihan Lokey have been engaged as independent sale advisors to the administrators to facilitate the process.

Read the most recent update here.