PM promises to acquire Rex from administration to keep regional services going

Anthony Albanese says the government will acquire Rex airlines if no other buyer is found, to keep regional flights operating.

Anthony Albanese says the government will acquire failed airline Rex in the absence of any buyers, to ensure crucial regional aviation services continue beyond June.

The 23-year-old airline was placed into administration in July last year with debts of more than $500m, and its jet operations to major cities immediately scrapped.

Since then, Rex’s regional flights have continued to operate with government support as administrators EY search for a buyer, so far without success.

To date, the Albanese government has provided an $80m loan which was being used to help keep Rex’s aircraft flying. In January the government became the airline’s biggest creditor after taking over $50m of the debt of investor PAG Asia Capital.

The move was intended to give the government more control over the administration process and save Rex from liquidation.

In the latest development, the government revealed it was prepared to work with any short-listed bidders on possible support measures to maximise the prospect of a successful sale.

“In the event there is no sale, the Albanese Government will undertake necessary work in consultation with relevant state governments on contingency options, including preparations necessary for potential Commonwealth acquisition,” said a statement.

Mr Albanese said regional Australians deserved access to quality and crucial regional aviation services.

“We are working collaboratively with the administrators of Rex to ensure that regional services continue beyond June 2025, including looking at what support the Commonwealth can provide,” he said.

“Regional Australians can be assured that our government will continue to fight to ensure these regional airfares remain available.”

Former Rex executive chairman Lim Kim Hai is one of four directors being pursued by ASIC in court. Picture: Justin Brierty

Transport Minister Catherine King said the government was making sure communities outside of capital cities were not short-changed.

“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,” said Ms King.

“We are recognising that today and stepping in to keep these routes in the air.”

In a further show of support, the government was waiving the “use it or lose it” test for Rex’s regional slots at Sydney Airports to ensure continued access through to October 2026.

Other airlines must use slots, or the time windows allocated for takeoffs and landings, at least 80 per cent of the time or lose access to Australia’s biggest gateway.

The latest show of support is expected to anger other regional airlines which competed with Rex on multiple routes without the benefit of government assistance.

The administration was last year extended until June 2025 when it became apparent finding a buyer would be difficult.

It’s believed the airline’s ageing fleet of Saab 340s is the problem, with EY bringing in engineering expertise to try to increase reliability and capacity.

As of a week ago, 29 of Rex’s 57 Saabs were parked at various airports awaiting maintenance with any buyer likely to have to outlay significant capital to renew the fleet.

At the same time, the Australian Securities and Investments Commission was pursuing Rex’s former directors in court over claims they engaged in deceptive and misleading conduct.

Lim Kim Hai, John Sharp, Lincoln Pan and Siddarth Khotkar have vowed to defend the allegations due to be heard in the New South Wales Supreme Court in April.

ASIC’s claims relate to an alleged failure to update the market in a timely fashion as to Rex’s true financial position, after telling investors the company was on track to make a profit in 2023.

Originally published as PM promises to acquire Rex from administration to keep regional services going