Regional Express Airlines (Rex) is set to be acquired by Nasdaq-listed aviation company Air T, marking a potential end to 15 months of uncertainty for the embattled regional carrier.
Sources not authorised to speak publicly said the deal could be revealed as early as this week, reported the Australian Financial Review. The agreement will still need creditor approval before it can proceed.
From voluntary administration to a US rescue
Rex collapsed into voluntary administration in mid-2024 after a costly expansion into capital city routes and mounting debt forced it to scale back operations. Administrators EY have since collected $25 million in fees while searching for a buyer, with the administration period extended three times, most recently until 5 December 2025.
According to the Sydney Morning Herald, the Albanese government had been reluctant to see the airline wound up, given Rex’s critical role linking regional and rural communities across Australia. It provided loans of up to $80 million to maintain regional operations and later acquired $50 million of debt from PAGAC Regulus Holdings Limited to help facilitate a sale. Any purchase will be subject to a vote of Rex creditors.
Air T operates FedEx and charter flights in the United States. The company controls maintenance and repair capabilities and has access to parts for Rex’s ageing Saab 340 fleet, which could help the airline avoid lengthy repair delays.
Regional lifeline or competitive imbalance?
The deal lands as regional aviation faces persistent cost pressures, parts shortages, capped demand and a tight labour market. Several smaller carriers have voiced concerns that prolonged government support for Rex has distorted competition on marginal routes, the Australian Financial Review reported.
Rex’s fleet of 57 Saab aircraft is no longer in production, so sourcing replacement parts is increasingly costly. Air T owns an Arizona aircraft boneyard and this could become a crucial supply line.
Industry reaction and implications
Transport Minister Catherine King stated that any government support for a buyer would depend on assurances of continued service to regional and remote communities, reported the Sydney Morning Herald.
The federal government is expected to seek similar commitments from Air T.
Transport Workers’ Union National Secretary Michael Kaine said: “In the event of a sale we need to see assurances from Air T that regional Australia can rely on Rex into the future, that workers are consulted, and their conditions are protected.”
A successful sale could stabilise fares and capacity in regional markets. Analysts also point to the need for investment in fleet modernisation to support long-term reliability.
What it means for travel agents
For the travel trade, the proposed sale signals route continuity for corporate and regional clients. Agents should monitor updates on schedules, refund policies and any codeshare arrangements through the transition.
If the transaction advances without disruption, confidence in regional itineraries may recover, which supports forward bookings and reduces servicing issues for itineraries dependent on feeder flights.
KARRYON UNPACKS: A US buyout could secure Rex’s future and safeguard regional routes, and it also reframes how Australia supports essential air services.
