Rex Airlines, the largest regional airline in Australia, has entered voluntary administration on Tuesday 30 July 2024.
The news follows yesterday’s announcement of a trading halt on the ASX until at least Wednesday. Rex signalled that it would release an announcement shortly.
Regional Express Holdings Limited and a number of its subsidiaries (ASX: REX) have now entered voluntary administration.
Samuel Freeman, Justin Walsh and Adam Nikitins of Ernst & Young Australia (EY Australia) have been appointed Joint and Several Voluntary Administrators by the Rex Group’s respective Boards of Directors.
The Group has grounded its domestic fleet of Boeing 737 aircraft, but regional services continue to operate using its Saab 340 turboprop aircraft.
Impact on Flights and Customers
Rex has announced the suspension of its Boeing 737 jet operations, which primarily service capital city routes.
However, their regional Saab 340 flights, which connect smaller towns and regional centers, are still operating as scheduled.
For passengers with upcoming flights on Rex’s 737 jet fleet, Virgin Australia has announced that they will offer free rebooking onto their own services for affected routes.
Rex and Virgin Australia are also exploring opportunities to support regional customers. This includes Virgin Australia selling Rex’s regional services through codeshare or interline arrangements.
Customers have been advised to contact Rex or their travel agent for the latest information on their flights.
According to a report by the ABC, airline staff told the national broadcaster that several crewmembers found themselves locked out of Melbourne and Brisbane accommodation, due to unpaid bills.
Government intervention?
The potential collapse of a major regional airline is a matter of national significance. The federal government may step in to assist in mitigating the impact on affected communities.
The Australian Transport Minister Catherine King has reportedly sought more information about the situation from Rex Airlines.
Prime Minister Anthony Albanese told the ABC that Rex remains an “important airline”. He noted the recent demise of new start-up airline Bonza.
“Rex is particularly important for regional communities and there are a range of communities where Rex is the only airline serving some of those destinations,” he said.
As the Rex Airlines voluntary administration situation unfolds, the focus will be on finding a solution that preserves as many jobs as possible and maintains essential air services to regional areas.
For now, administrators will now face the task of assessing the airline’s financial viability and developing a plan to secure its future.
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