While Labor prime minister Anthony Albanese refused to disclose how much it would cost taxpayers, he says the government will buy Rex to ensure the embattled tiny airline continues its crucial regional aviation services if a buyer can’t be found.
The airline has already been operating as a surrogate state-owned carrier with the government providing $80 million in funding to keep the 23-year-old airline in the air.
While the debt-laden airline closed its Boeing 737 jet operations between metropolitan cities when administrators EY were appointed last July to search for a buyer, core regional services have remained in operation.
Given that the airline owes more than $500 million, the search for a buyer willing to resurrect the airline and hence takeover its debt, including the government’s – as the principal secured creditor - has been fruitless.
What’s adding further doubt about the airline’s commercial viability is the airline’s reliance on ageing 36-seater Saab 340 turboprop planes that are increasingly costly to maintain. Also on the block for sale by the administrators are Rex’s flight academy in Wagga Wagga, plus other assets including the charter subsidiary Pel-Air and flight simulators.
The government is not a bidder in the sale process.
In the absence of any buyers, the June 2025 administration period has been extended in the hope that a potential buyer will finally emerge. To assist the buying process, the government has committed to working with any buyer brave enough to cobble an offer together.
As an added sweetener to the deal, the government is planning to waive the “use it or lose it” test for Rex’s regional slots at Sydney Airports to ensure continued access through to October 2026.
“In the event there is no sale, the Albanese government will undertake necessary work in consultation with relevant state governments on contingency options, including preparations for potential Commonwealth acquisition,” a government statement said.
“Terms of commonwealth support will be subject to negotiation but will be conditional on commitments by bidders to provide an ongoing, reasonable level of service to regional and remote communities, the need to provide value for money to taxpayers and good governance,” the government said.
Anthony Albanese said: “Regional Australians deserve access to quality and crucial regional aviation services… Regional Australians can be assured that our government will continue to fight to ensure these regional airfares remain available.”
The transport minister, Catherine King, also reiterated regional Australia's reliance on Rex’s services.
“When markets fail or struggle to deliver for regional communities, the government has a role to ensure people do not miss out on opportunities, education and critical connections,” she said.
“We are recognising that today and stepping in to keep these routes in the air.”
Meantime, while rival regional airlines have accused the government of being locked out of discussion around Rex’s future, the Australian Securities Commission (ASIC) is pursuing Rex’s former directors in court over claims they engaged in misleading and deceptive conduct.
