Rex Airlines has announced it has entered voluntary administration and has cancelled all flights between major airports.
A statement posted on Rex’s website late on Tuesday said Regional Express Holdings Limited and a number of its subsidiaries under the Rex Group had entered voluntary administration.
Ernst & Young Australia has been appointed administrator.
The statement said regional Saab 340 flights were not affected and would continue to operate, but domestic 737 services were suspended and Virgin Australia offered affected Rex passengers a free rebooking.
“Flights between major airports have been cancelled and the entire domestic fleet of Rex Group Boeing 737 aircraft is grounded,” the statement said.
‘Rex is contacting affected customers directly.’
The statement said Rex and Virgin Australia were exploring opportunities to support regional customers, including Virgin selling Rex’s regional services through codeshare or interline arrangements, and making Virgin’s frequent flyer benefits available to Rex’s regional customers.
Virgin Australia chief executive Jayne Hrdlicka said it was “a difficult time for Australian aviation”.
Rex Airlines has entered voluntary administration and suspended all flights between major airports.
“Our team is now moving quickly to support Rex customers and staff,” he said in a statement after Rex’s announcement.
‘Affected Rex customers will be assisted to rebook on an equivalent Virgin Australia service at no charge.’
Virgin also offered to support affected Rex employees, who could apply for vacant positions through the airline’s website, it added.
Ms Hrdlicka said Virgin intended to partner with Rex’s regional business to enable “seamless access” to Virgin Australia’s domestic and international destinations through potential codeshare or interline arrangements in the future.
“The Virgin Australia team is thinking today of all of us who work at Rex, an airline with a proud and important role in Australian aviation, particularly in regional Australia,” he said.
Rex employs around 2,000 people.
It began service between Sydney and Melbourne, one of the world’s busiest routes, in 2021.
Regional Express shares had been halted on the Australian stock exchange following recent boardroom turmoil and multi-million-dollar losses.
An announcement was expected before the opening of trading on Wednesday.
The suspension of operations came after it was reported that Rex called in consultancy firm Deloitte to review the airline’s books.
Earlier on Tuesday, the prime minister had questioned the airline’s expansion into major urban routes.
He said he would consider proposals to save Rex, but the airline received substantial public funding “without strings attached”.
“One of the things I raised concerns about was the lack of conditions for Rex, for example, to move away from its traditional role of being a regional airline to offer flights, for example, from Sydney to Melbourne,” Albanese told reporters.
National Senator Bridget McKenzie said the flights Rex launched, including a recent Melbourne to Perth route, inspired competition with major aviation players, often resulting in cheaper fares.
Virgin Australia has offered passengers scheduled for Rex domestic 737 services the chance to rebook free of charge.
“Let us not continue to pretend that Qantas’ behaviour is acceptable in the aviation industry,” Senator McKenzie said.
“Every time they are faced with a challenge, they look to emulate airlines like Rex… who have sought to provide Australians with another way to travel.”
Unlike Bonza, which entered voluntary administration in April, Rex mostly owns its aircraft rather than leasing them.
Its core fleet consists of 61 SAAB 340s and seven leased Boeing 737-800s, out of a total of 123 aircraft.
Many regional communities rely on the airline, which was created 22 years ago after the collapse of Ansett.
In Orange, central west New South Wales, Mayor Jason Hamling said he was grateful his community had multiple airlines, including Qantaslink and Link Airways.
Since the arrival of COVID-19, Rex has struggled to achieve profitability. In February, it reported a net loss of $3.2 million for the first half of the 2023/24 financial year.
Rex shares were last trading at 56.5 cents on Friday. A month ago they were at 79 cents.