Government bails out Rex Airlines
The federal government is set to take on Rex Airlines' $50 million debt in order to keep the company, that collapsed on June 30th 2024, servicing regional Australia.
Rex has been struggling to stay afloat in the six months since the company entered voluntary administration, with Ernst and Young (EY) appointed administrators, putting a strain on domestic travel to regional areas.
Transport Minister Catherine King and Finance Minister Katy Gallagher announced on Thursday that the government would acquire some of Rex's debt to prevent liquidation, which they said would harm regional and remote communities that rely on the carrier.
"By acquiring the debt, the government will become the principal secured creditor and will seek to become a voting member of the Committee of Inspection," the ministers said in a joint statement.
"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 continues to work closely with the administrators through the extended convening period."
"This makes clear the government's ongoing commitment to maintaining access to aviation services for regional and remote communities, and recognises the critical role of the Rex network to local economies."
Ernst and Young has a just few months to secure Rex's commercial future after the Federal Court late last year granted an extension of the voluntary administration to June 30th 2025.
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