Albanese government leaves door open for potential Commonwealth acquisition of beleaguered Rex Airlines

A major union has welcomed the federal government’s promise to keep beleaguered Rex Airlines flying in regional and remote Australia.

The Albanese government has left the door open for taxpayers to acquire failed regional airline Rex after the carrier was placed into voluntary administration last year.

On Tuesday, Anthony Albanese guaranteed Rex would continue its regional flights beyond the current June 30, 2025 deadline for administrators to find a bidder, with the Commonwealth stating they were open to providing ongoing support to short-listed bidders.

In return, the potential buyer would need to guarantee a “reasonable level of service to regional and remote communities,” and ensure good governance and value for money to taxpayers.

While the government has said it would prefer a market-based outcome, it didn’t rule out the potential for the Commonwealth to acquire the company as a contingency option.

The government has confirmed it would consider acquiring Rex if it does not find a buyer. Picture: NewsWire/ Jeremy Piper

However, this would be subject to consultation with state governments and other necessary checks.

“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,” the Prime Minister said.

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

The government will also protect Rex’s takeoff slots at Sydney Airport until October 24, 2026 by seeking a waiver to the ‘use-it-or-lose-it’ provisions which require airlines to occupy the slot 80 per cent of the time.

Transport Minister Catherine King said the government had a responsibility to ensure regional communities were able to access flights.

“Regional Australians rely on these important services and the Albanese government making sure communities outside capital cities aren’t short-changed,” she said.

“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.”

Transport Minister Catherine King said the government would ensure Australians in regional and remote Australia would continue to access to Rex flights. Picture: NewsWire / Martin Ollman

Finance Minister Katy Gallagher said people living in regional and remote Australia deserved “reliable, affordable and accessible air travel”.

“That’s why we’re taking steps to ensure the best possible deal for the sale of Rex,” she said.

“Aviation services are essential for our regions, and our government is committed to seeing these services continue into the future.”

The Transport Workers Union welcomed the action, with the national secretary Michael Kaine saying it would mean “certainty” for workers, businesses, and all those “relying on these critical routes for essential healthcare appointments and to stay connected with family and community”.

He said it was a “vital step” in the future of aviation, rather than for “overpaid executives”.

“Workers and passengers are sick to death of airline and airport executives cashing in bonuses while they’re not sure if they’ll have a job or if their flight will actually get off the ground,” Mr Kaine said.

“Today’s announcement is a glimmer of hope for the future of aviation, after a decade of relentless pursuit of short-term profits that has driven the industry to its darkest point.”

In January, the government confirmed it had become the airline’s largest creditor after it acquired $50m of debt from AGAC Regulus Holdings Limited.

TWU National Secretary Michael Kaine welcomed the government’s move to supoo. Picture: NewsWire / John Appleyard

Additionally, the carrier was also given a taxpayer subsidised loan of $80m to ensure Rex could continue operation its regional routes until June 30, 2025.

Rex is also facing a legal probe from the corporate watchdog over claims it misled investors on its financial health dating back to February 28, 2023, more than a year before Rex entered voluntary administration on July 30, 2024, with about $500m in debt.

ASIC alleged in December that former executive chair Lim Kim Hai and fellow directors John Sharpe, Lincoln Pan and Siddharth Khotkar “contravened their directors’ duties” and released a misleading ASX announcement on February 28 that said they had an optimistic outlook on its “positive operating profits”.

Originally published as Albanese government leaves door open for potential Commonwealth acquisition of beleaguered Rex Airlines