Regional airline Rex has received a short-term financial lifeline from the Australian government to avoid liquidation. The government's support will allow a second sale process to find a buyer for the struggling carrier, which has been facing financial difficulties since entering the competitive Sydney-Brisbane-Melbourne market.
Rex’s future has sat in limbo since entering administration in the middle of last year, but Thursday’s lifeline from the Albanese government has secured the regional carrier in the short term.to “avoid any adverse event” such as the firm plunging the airline into liquidation.
However, the government’s latest cash injection has given the vital regional carrier a brief lifeline as it continues looking for a buyer.Rex's woes stem from a 2020 decision to enter the golden triangle of Sydney-Brisbane- Melbourne, with the airline struggling to match up against Qantas and Virgin Australia.
Labor announced it had purchased the debt of Rex's major creditor PAG on Thursday. Picture: NewsWire / Jeremy Piper Speaking about the regional carrier’s prospects, Flight Centre’s CEO Graham Turner said Rex was unlikely to attract attention from a foreign carrier as the airline only operates on domestic regional routes.
Comparatively, fellow regional carrier Alliance Airlines’ average plane is almost 24 years old while Qantas’ average aircraft age sits at 16 years old and Virgin’s 12. Pressed on what this would look like, TWU national secretary Michael Kaine called on Labor to purchase the carrier and run it as a government business enterprise until it could find a suitable buyer.
A key rationale behind calls to nationalise Rex was that the carrier would not be strictly focused on profit or shareholder return, allowing the airline to service the regions without strict fiscal constraints.“Qantas and Virgin had their opportunity to properly service the regions and they've chosen not to and the reason they've chosen not to is because they are dictated to in their decision-making processes by profit considerations,” he said.
"Obviously, as a creditor, we would be seeking to get that money, that debt back through any second sale process," she told reporters on Thursday.
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