Rex Airlines rescued for now as Anthony Albanese’s government hands over cash
The government has stepped in to rescue regional airline Rex after it went into voluntary receivership with debts of about $500 million.
Transport Minister Catherine King announced government funding for the airline on Thursday afternoon to provide certainty for regional travellers.
“Continuing Rex is in Australia’s best interests and the government is working closely with leaders to ensure a strong regional aviation presence now and in the future,” she said in a statement.
This guarantee ensures that if Rex Airlines bookings to or from a regional destination are cancelled during the administration period, passengers will receive a full refund.
It includes all regional flight bookings after Rex went into voluntary bankruptcy at 9:31 p.m. on July 30.
In addition to financial support, Ms King said her department would continue to work with the administrator, EY, on plans for the airline’s survival.
“We also expect the administrator to respect and prioritize the rights of Rex employees,” she said.
“This assurance is a message to regional Australia that we know how important reliable aviation services are to you and we will not allow your communities to be left behind.”
EY partner Sam Freeman said he was grateful to the government for providing a lifeline to the regional airline.
“The guarantee ensures that Rex can continue to fly while we carry out the recapitalisation of the airline and secure its future,” he said.
“We are currently in the process of finding an investor committed to a sustainable commercial regional network.”
Mr Freeman told creditors last week that Rex owed about $500 million to lessors, airports, fuel stations, staff and tens of thousands of airlines.
In addition, the company was unable to pay approximately 600 employees their final wages and benefits after they were laid off.
The airline is responsible for five percent of domestic passengers, while Qantas and Virgin account for the remaining 95 percent.
