Embattled regional airline Rex has been given a lifeline to its operations after the federal government allocated up to $80 million to keep its regional routes running.
Rex went into voluntary administration in July after its fleet of Boeing 737s operating between major metropolitan centers was grounded.
Its management was handed over to administrators EY Australia, while Rex Regional Services continued as a buyer or a financial lifeline was sought for the airline.
Transport Minister Catherine King and Labor Minister Murray Watt announced on Tuesday that the government would provide up to $80 million and grant early access entitlements to former Rex employees.
The money will support the continuation of critical services for regional communities, they said in a joint statement.
Rex’s administrators plan to apply to the Federal Court to extend voluntary administration until June 30, 2025.
If the request is granted, the government will continue to guarantee ticket sales made throughout the administration period up to that date.
“The guarantee has been effective so far and has not yet been used as flight bookings are holding up well,” the ministers said.
Embattled regional airline Rex (stewardess pictured) has been given a lifeline after the federal government allocated up to $80 million to keep its regional routes running.
Rex (plane pictured) went into voluntary administration in July after its fleet of Boeing 737s operating between major metropolitan centers was grounded.
More than 600 workers were laid off when it was revealed that Rex was struggling under the weight of $500 million in debt.
In August, the federal government stepped in to guarantee regional flight bookings but resisted bailout calls.
Rex’s administration process is progressing, the government said, noting the recent sale of its Pel Air Aviation business to Helicorp Pty Ltd, which is part of Toll Aviation.
The proceeds of the sale will be used to pay secured creditors.
“My department continues to meet regularly with administrators as they work to implement a strategy for the regional aviation business,” Ms King said.