Rex Airlines collapse: Administrators tell passengers to stay away as it focuses on regional operations

Federal Aviation Minister Catherine King has vowed to work closely with Rex Airlines administrators as they try to return the collapsed carrier to its regional roots.

While remaining tight-lipped about potential support for the debt-laden group, Ms King said her bureaucrats had met with Rex Airlines administrators following their appointment late Tuesday and the immediate cancellation of flights between major airports.

The minister said it was a relief that Rex was continuing to fly its propeller-driven aircraft to all its regional routes across Australia. “Rex’s continuation is in the best interests of regional Australians, the travelling public, its workers and the aviation sector more broadly,” she said.

The Sydney-based airline has hit financial difficulty after the souring of its expansion over the past three years from its regional aviation stronghold to the supposedly golden triangle of Brisbane, Sydney and Melbourne, and then to all State capitals.

Rex’s expansion into markets traditionally dominated by Qantas was fuelled by a $150 million secured debt deal with Hong Kong-based private equity player PAG, which is likely to play a key role in any financial restructuring.

Rex and the administrators have struck a deal with rival Virgin Australia to provide replacement seats for customers who had booked on its abandoned routes between major destinations.

Qantas is also playing Good Samaritan, inviting affected Rex major airport customers to try to book on the same route with its Qantas or Jetstar brands.

The Qantas offer is open until August 31 — 17 days longer than the Virgin offer.

Virgin Australia chief executive Jayne Hrdlicka urged customers who had been due to fly with Rex within 48 hours to call the customer service line on 13 67 89.

It initially only referred in passing to an administration and provided links to email addresses at Ernst & Young.

A tweet was posted on Rex’s X account at 9.05pm on Tuesday night saying administrators had been appointed to the airline.

Mr Freeman urged customers with tickets on the cancelled flights to contact Virgin Australia.

“It’s important that the holders of affected tickets should not come to the airport for their flight until they have re-booked their flights through contacting Virgin,” Mr Freeman said.

Mr Freeman said his administration was aimed at continuing Rex’s “long and proud history of servicing regional or remote communities across Australia”.

Rex late Tuesday grounded its fleet of Boeing 737 jet aircraft that its share market-listed parent Regional Express Holdings began leasing in 2021 as part of its attempted expansion into busy metropolitan routes.

The expansion was helped by debt funding from Hong Kong private equity player PAG and used aircraft leased from the Virgin administration triggered in 2020 by the COVID-19 crisis.

Virgin Australia has reportedly agreed to lease three of those aircraft as it grapples with delays in the deliveries of new jets.

PAG is likely central to any restructuring of Rex given it struck a $150 million secured convertible note deal with Rex in early 2021 when its shares were trading at more than triple its recent prices.

The PAG deal was linked directly to the airline’s now-abandoned major airport ambitions.