Rex Airlines Faces Administration Amid Operational Grounding

Late Tuesday, EY (formerly Ernst & Young) announced its appointment as administrators for Rex Airlines, leading to the grounding of the airline's Boeing 737 operations between major cities, including Sydney, Melbourne, and Brisbane. Virgin Australia has stepped in to assist affected passengers by offering free rebooking options. This development follows significant discussions between federal transport minister Catherine King and Rex's leadership, as the airline had requested a trading halt prior to a major market announcement. King emphasized the government's commitment to regional aviation and Rex's role within it, while awaiting the airline's forthcoming announcement to the Australian Securities Exchange (ASX). This situation arose after reports indicated that Rex had engaged Deloitte consultants to address its financial challenges. Meanwhile, tensions within Rex's board have escalated, with reports of staff being locked out of hotels and company accounts, further complicating the airline's operational status. As of Tuesday afternoon, Rex had ceased taking bookings for its jet services between capital cities, although regional services remained available. Opposition transport spokesperson Bridget McKenzie expressed caution regarding the government's support for Rex, referencing prior knowledge of Bonza's financial troubles and the government's refusal to assist the budget carrier. The Australian stock exchange had suspended trading of Rex's shares at the airline's request, highlighting the precarious state of the company. Since 2020, Rex has sought to capture a share of the lucrative capital city market, leveraging the instability in Australia's domestic aviation sector. However, leadership tensions and recent operational challenges have raised concerns about the airline's future viability.