The Australian Government has stepped in with an $80 million rescue package to support Rex Airlines’ regional flight services.
In a parallel development, Rex’s Administrators plan to request court approval to extend the Voluntary Administration period until June 30, 2025. This extension aims to help establish a sustainable future for the airline’s operations.
Shoring up Regional Aviation
The airline’s financial troubles began when it entered voluntary administration in July 2024, following unsuccessful attempts to compete in the domestic market.
Rex has since given up its Boeing 737-800 fleet, abandoning its ambitious goal of capturing one-third of the domestic market share from Qantas and Virgin Australia. During the administration period, Rex has maintained its regional operations using its existing fleet of Saab 340 aircraft.
Australian Federal Minister for Infrastructure, Transport and Regional Development Catherine King gave comment on the $80 million injection. King said that the funding was “another demonstration of our commitment to maintaining regional aviation access.”
“It recognizes the important role that Rex plays in regional communities right across Australia,” King explained.
EY partner and Voluntary Administrator Sam Freeman expressed gratitude to Minister King. “The Minister’s strong support for regional Australia has been crucial,” Freeman stated. “This government financing will enable continued service to regional communities throughout the extended administration period.”
Rex Airlines Strategy
According to Freeman, the funding and administration extension will support a comprehensive business improvement strategy. This includes substantial investments to enhance Rex’s operational capabilities and expand its aircraft fleet.
“We’re seeking this extension to strengthen our regional network while implementing our business improvement strategy, ultimately preparing the business for sale,” Freeman explained.
“Our plans include expanding our operational fleet, providing job security for Rex employees, and investing in growth opportunities. These measures aim to boost both reliability and capacity across our regional routes.”
Domestic Airfares Increase
Since their exit from the lucrative capital city ‘Golden Triangle’ – Sydney, Melbourne and Brisbane – airfares have risen, according to the Australian consumer watchdog ACCC.
Average airfares on major city routes increased by 13.3% since Rex’s exit. This increase is attributed to reduced competition in the market, with Qantas, Jetstar, and Virgin Australia now dominating the domestic market.
The ACCC has expressed concern about the impact of this reduced competition on consumers, particularly in terms of higher prices and fewer choices.
“The recent spike in airfares corresponds with a less competitive domestic airline sector after Rex’s exit from 11 of the 23 services between metropolitan cities,” ACCC Commissioner Anna Brakey said.
Click the banner to subscribe to our weekly newsleter.
Click the photo to join our WhatsApp channel so then you can stay up to date with everything going on in the aviation industry!
