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Federal Government gives Rex $80 million for regional routes

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Federal Government gives Rex $80 million for regional routes
The Australian Government has given Rex Airlines $80 million to keep regional air links across Australia up and running until mid-2025.

The $80 million in support is contingent on the Federal Court agreeing to extend the Rex voluntary administration period until June 30, 2025.

Rex went into administration in July.

EY, who is the administrator for the airline, is planning to apply for the extension shortly.

Although its capital-to-capital routes were grounded when Rex entered administration, the airline is still flying to a substantial number of regional destinations in Queensland, Victoria, New South Wales, Tasmania, South Australia and Western Australia.

The Federal Government had already agreed to guarantee refunds should regional flights operated by Rex be cancelled since the company entered administration, however the guarantee arrangement has not been exercised to date. The guarantee will continue until the end of June next year too.

The Federal Government said its support of Rex is a “commitment to maintaining regional aviation access”.

From a business events standpoint, it provides delegates living outside of major cities more options to travel to attend conference or events.

Rex administrators say the extension of the voluntary administration period would be used for business improvement to help Rex continue operating into the future.

“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,” said EY partner, Sam Freeman, on behalf of the administrators.

“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.”

As part of today’s announcements, former Rex employees are also being granted access to their entitlements, which can be held back while a company remains in administration.