Rex Airlines: Federal government to prop up embattled carrier with $80 million lifeline for regional flights

Embattled regional airline Rex has been thrown an operations lifeline after the federal government earmarked up to $80 million to keep its regional routes running.

Rex went into voluntary administration in July after its fleet of Boeing 737s operating between major metropolitan centres was grounded.

Its management was handed to administrators EY Australia, while Rex’s regional services continued as a buyer or financial lifeline was sought for the airline.

Transport Minister Catherine King and Workplace Minister Murray Watt announced on Tuesday the government would provide up to $80 million and grant early access to entitlements for Rex’s former employees.

The money will support the continuation of critical services for regional communities, they said in a joint statement.

Rex’s administrators plan to apply to the Federal Court to extend the voluntary administration to June 30, 2025.

If the application is granted the government will continue to guarantee ticket sales made throughout the administration period to that date.

“The guarantee has been effective so far, and has yet to be used with flight bookings holding up well,” the ministers said.

More than 600 workers were made redundant as it was revealed Rex was struggling under the weight of $500 million of debt.

In August, the federal government stepped in to guarantee bookings on regional flights, but resisted calls for a bailout.

The administration process for Rex was progressing, the government said as it noted the recent sale of its Pel Air Aviation business to Helicorp Pty Ltd, which is part of Toll Aviation.

The sale proceeds will be used to repay secured creditors.

“My department continues to meet regularly with the administrators as they work to implement a strategy for the regional aviation business,” Ms King said.