The Federal Government has flagged a lifeline for the embattled Regional Express airline, months after it entered voluntary administration.
The government has announced the latest move to safeguard regional travel provided by REX, which flies into and out of Mount Gambier.
Regional Express went into administration in July last year with estimated debts of $500m. The airline immediately cancelled its services between capital cities, however flights from to and from regional centres, including Mount Gambier, have continued.
The regional services were initially saved after the Federal Government announced it would guarantee regional flight bookings for Rex customers throughout the voluntary administration process.
While the process continues, the government last month took steps to ensure Rex Airlines’ regional services will continue, supporting the administrators on next steps.
In January the government acquired $50m of debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited (PAG), in a bid to prevent an adverse outcome for regional communities, such as liquidation, and ensure the continued connectivity of Australia’s regional and remote communities.
By acquiring the debt, the government has become the principal secured creditor and will seek to become a voting member of the Committee of Inspection.
Whilst the accelerated initial sale process undertaken by the administrators in mid-2024 did not find a suitable buyer for the airlines’ regional operations, the government has continued to work closely with the administrators through the extended convening period.
Federal Transport Minister Catherine King today revealed in capital city media that the government could acquire the airline if a buyer was not found.
Minister King revealed that the government would consider “contingency options”, including “potential Commonwealth acquisition”.
“When markets fail or struggle to deliver for regional communities, the government has a role to ensure people do not miss out on opportunities, education and critical connections,” Minister King said in a statement.
“We are recognising that (today) and stepping in to keep these routes in the air.”