Federal Government Steps In to Support Regional Airline Rex Amid Financial Crisis
- Regional airline Rex Airlines was facing closure with debts of about $500 million.
- The Australian government intervened and provided cash to rescue Rex Airlines from voluntary administration.
- The cash injection helped Rex Airlines avoid closure for now.
The Australian Federal Government has intervened to assist regional airline Rex, which recently entered voluntary administration with debts totaling approximately $500 million. Transport Minister Catherine King announced a funding package aimed at providing stability for regional travelers, emphasizing the importance of Rex's continued operation for the benefit of Australia. The government is collaborating with the airline's administrators to ensure a robust regional aviation presence moving forward. As part of the support, the government has guaranteed that passengers will receive full refunds for any Rex bookings to or from regional destinations that are canceled during the administration period, which began on July 30. This measure is intended to reassure regional communities about the reliability of air services, with Minister King highlighting the government's commitment to not leaving these areas behind. EY partner Sam Freeman expressed gratitude for the government's assistance, stating that the guarantee will enable Rex to maintain operations while seeking to recapitalize the airline. The administration team is actively searching for an investor who can commit to a sustainable regional network, as Rex has been a key player in the domestic aviation market for over two decades, carrying five percent of domestic passengers. Rex's financial troubles have resulted in significant challenges, including the inability to pay final wages and entitlements to around 600 employees who were recently let go. The administrators are reaching out to potential buyers and investors to secure the airline's future amidst its ongoing financial struggles.