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Embattled airline Rex will be able to keep its regional operations going after receiving an $80million government subsidy.

The airline went into voluntary administration earlier this year with EY Australia called in to manage its affairs. Some 600 workers were affected by the grounding of the Rex fleet.

Former employees will shortly receive payment of leave, notice and redundancy entitlements or immediate access to the Federal Government’s Fair Entitlement Guarantee.

The administrators have announced they intend to apply to the court for an extension of the voluntary administration through to June 30 next year.

The request for an extension is supported by the $80million financing facility provided by the government which will support the administrators to secure a commercial future for the airline.

“This Australian Government financing facility will enable us to continue to support regional communities through an extension of the voluntary administration,” said Sam Freeman, speaking on behalf of EY.

Mr Freeman said that the facility and an extension of the voluntary administration would be used to invest in a business improvement program to help secure Rex’s commercial future.

This includes significant investment in the performance of the Rex business including increasing the number of operational aircraft.

“The extension we are requesting will help us to build a strong network for regional Australia, enabling us to continue to operate the regional network while undertaking a business improvement plan to reposition the business for sale.

“We’re planning to increase the size of the operational fleet, while providing greater clarity for the Rex team and investing in strategic growth initiatives. Through this plan, we’re looking to increase reliability and capacity on the regional routes.”

Following a competitive sales process, the Rex Group has secured a sale of the wholly owned specialist aeromedical subsidiary, Pel-Air and other non-core assets of the Group.

The sales to date have secured a return to secured creditors and other asset sales are ongoing.

While the sale of the regional network process will continue during the extension, the immediate focus of the administrators is implementing the business improvement plan.

The administrators reinforced their commitment to the regional and remote communities the Rex regional network connects.

“Importantly, as we’ve demonstrated throughout the voluntary administration – an extension will not disrupt the continued operation of the regional network, which is such a critical part of regional and rural Australia’s connectivity,” added Mr Freeman.

“The actions to be undertaken in the extension period are expected to enhance the network.”