Regional airline Rex has entered voluntary administration. The union for aviation workers says 610 jobs have been lost.
All Rex flights between major cities have been cancelled, but the carrier’s regional services will continue to operate.
Voluntary administration means a company can’t afford to pay its debts, and has appointed an independent body to take control of its operations.
Here’s what we know about the future of Rex.
Rex
Rex launched after two regional airlines, Hazelton and Kendell, merged in 2002. It became publicly listed on the Australian Securities Exchange (ASX) three years later.
Rex has said it operates on “a belief that the bush needs and deserves an air service of quality” to connect regional communities and bigger cities.
It’s Australia’s only major commercial domestic airline not owned by Qantas or Virgin. On Monday, Rex announced an ASX “trade pause” — a temporary freeze on anyone buying or selling its shares.
Troubles
Rex has been struggling to recover from disruptions caused by COVID-19. In the 2022/23 financial year, the airline reported $30 million in losses.
Rex announced a six-month pause on some of its services in September 2023.
It was expected to resume its full schedule in March but extended the pause by an additional seven months.
The company’s board has also faced significant recent changes with the resignation of its executive chairman and several directors.
On Monday, Rex announced an ASX “trade pause” — a temporary freeze on anyone buying or selling its shares.
On Tuesday night, the company announced it had gone into voluntary administration.
Affected customers are being contacted directly by Rex, with Virgin offering free seats for customers with Rex tickets on flights between major airports.
Administration
Financial services company Ernst & Young Australia (EY) has been appointed as voluntary administrators.
EY said Rex and Virgin Australia are “exploring ways to support regional customers.”
This could include Virgin selling tickets for regional services using Rex’s planes and routes.
Workers Union
The Transport Workers’ Union (TWU) represents workers in the airline industry.
In a post to X, TWU National Secretary Michael Kaine said: “Terrible news to break this morning of hundreds more aviation job losses with the collapse of Rex.”
Kaine called for the Federal Government to invest in the aviation industry, “to protect jobs, entitlements and regional Australia.”
Response
Federal Transport Minister Catherine King said the Government was “working closely” with the administrators.
Conversations are expected to continue today, to ensure “regional aviation has a strong future in this country,” King said.
“Rex’s continuation is in the best interests of regional Australians, the travelling public, its workers and the aviation sector.”
It’s not yet clear if the Government’s response will include ‘bail out’ funding to assist Rex.
Bonza
Concern about the future of Rex comes less than a month after budget airline Bonza went into liquidation.
Bonza was Australia’s first low-cost independent airline to launch in 15 years when its services began in January 2023.
Administrators confirmed last month that over 300 Bonza employee contracts had been terminated after no buyer was found to potentially save the airline.
Shadow Transport Minister Bridget McKenzie urged the Government to “not allow a repeat of Bonza”.
