A buyer has been found for Regional Express Airlines, which collapsed into administration 15 months ago.
Sources with direct knowledge of the deal, who are not authorised to speak publicly, said Nasdaq-listed US aviation company Air T had agreed to buy Rex, and the deal would leave most of the airline’s creditors empty-handed.
The terms of the deal were expected to be released as early as this week, the sources said.
Labor says it will consider taking ownership of Rex if a buyer is not found.Credit: AFR
Rex, which serves Australia’s regional markets, was placed in voluntary administration in 2024, with E&Y named administrators while the Albanese government sought a buyer.
Rex had pursued expansion from regional routes into the major cities, which led to it competing with Qantas and Virgin. In the process, its debts mounted and operational difficulties increased.
Rex operates 57 planes, including 22 Saab 340B and 35 Saab 340B Plus aircraft. Part of Rex’s difficulties revolved around its ageing fleet, which is, nonetheless, an ideal size for operating in regional airports.
Air T operates various aviation businesses in the US, including FedEx flights and charter services. Crucially, Air T has access to parts needed for Rex’s decades-old Saab 340 aircraft.
Many of Rex’s regional services, while crucial for travellers in regional and rural Australia, are not economical for commercial airlines to run.
With Rex considered a connector between Australia’s far-flung regional cities in the interior and the more populated cities on the coasts, the Albanese government was reluctant for the airline to be wound up as a company.
In 2024, the federal government provided loans of up to $80 million to keep Rex’s regional routes operating until mid-2025. It also acquired $50 million of debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited, this year to pave the way for the airline’s continued operation.
In June, Transportation Minister Catherine King said that any potential government support for a successful bidder “will be conditional on commitments to provide an ongoing, reasonable level of service to regional and remote communities [and] the need to provide value for money to taxpayers and good governance”.
“The Albanese government remains committed to maintaining access to aviation services for regional and remote communities that are essential to their health, education and economic outcomes, and we recognise the critical role of the Rex network to local economies,” she said.
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