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Govt gives Rex $80m bailout; airline set to apply for extension to VA, guaranteeing ticket sales

In a massive boost to regional travel, the Federal Government has thrown beleaguered airline, Rex, a lifeline to the tune of $80 million. 

In a massive boost to regional travel, the Federal Government has thrown beleaguered airline, Rex, a lifeline to the tune of $80 million. 

Transport Minister Catherine King and Workplace Minister Murray Watt made the announcement this morning, which also included granting early access to entitlements for Rex’s former employees, who were made redundant.

According to a joint statement, Rex’s administrator, Ernst & Young Australia, is now set to apply to the Federal Court to extend its voluntary administration until 30 June 2025. 

If that’s approved, the government will guarantee ticket sales made during the administration period up to that date. 

“The Albanese Government continues to support critical regional aviation services, today announcing it will provide financing of up to $80 million to keep Rex’s regional routes running during an extension of the voluntary administration process, as well as granting early access to entitlements for former employees of the business,” the ministers said.

Rex in Sydney.
Rex in Sydney.

“The Government has agreed to grant early access to former employees of Rex Airlines Pty Ltd (RAL), which operated the intercity jet services, to the Fair Entitlements Guarantee (FEG) while RAL is in voluntary administration.

“In addition, Rex’s administrators and main secured creditor PAG have advised they will pay the entitlements of former employees of the regional business who have been made redundant during the voluntary administration period.

With Rex’s administrator planning to apply to the Federal Court of Australia to extend the Voluntary Administration to 30 June 2025, the ministers said the new measures will support the carrier’s “critical services for regional communities”.

“The Government will also continue to guarantee ticket sales made throughout the voluntary administration to 30 June 2025, should the Federal Court agree to the extension application. The guarantee has been effective so far, and has yet to be used with flight bookings holding up well,” they said.

Rex crew walking in front of plane on tarmac
Rex crew.

The joint statement says the announcement demonstrates the government’s “commitment to maintaining regional aviation access, recognising the important role that Rex plays in regional communities right across Australia”.

“My department continues to meet regularly with the administrators as they work to implement a strategy for the regional aviation business,” it said.

“I encourage passengers to continue to support Rex’s regional operations.”

TWU responds

The Transport Workers’ Union (TWU)  has welcomed the announcement but has urged the government to invest in a stake in the airline to guarantee its long-term future.

“This is a positive announcement for the redundant workers whose entitlements have been in limbo, as well as for regional Australia’s business, tourism, healthcare and community services. The efforts of the Federal Government to deliver these entitlements for workers, who’ve waited months for answers, will be a huge relief heading into Christmas,” TWU National Assistant Secretary Emily McMillan said.

The much-anticipated Rex Flyer has launched.
Rex grounded its Boeing services earlier this year.

According to a recent YouGov poll, most Australians (71%) are in favour of the government stepping in to ensure Rex’s regional operations survive.

“In October polling showed there is overwhelming support in Australia for the Federal Government to intervene and keep Rex flying. There are hundreds of jobs still on the line and there is a clear mandate here for the government to step in and safeguard critical aviation routes and protect those jobs by taking a stake in the airline.

“We need to see this intervention followed up by a long-term solution for regional travel. The insatiable profit focus of privatised airlines and airports is failing regional Australia and aviation workers. A Safe and Secure Skies Commission would ensure stability for the industry and give certainty to workers, businesses and regional communities.”

Rex entered voluntary administration in July, immediately grounding all B737 flights from major airports. However, the carrier continued to operate regional flights using its Saab 340 aircraft.