Low-cost airline Rex has declared bankruptcy and suspended flights between capital cities.
The airline suspended trading on the ASX on Monday and on Tuesday evening it was confirmed that EY had been appointed as administrator.
Rex will cancel flights between major cities and focus on regional flights.
A source told the Australian Financial Review the federal government had stepped in to ensure regional flights were not axed, but the airline will no longer compete with other airlines on established routes between larger cities.
Virgin Australia immediately stepped in to support Rex customers by offering free transfers to equivalent flights.
The airline also encouraged Rex staff to apply for jobs with the airline.
Virgin Australia has also acquired Boeing 737-800s from Rex, and the airline plans to secure leases for three of the aircraft that Rex will no longer use.
“Virgin Australia has made an offer to Rex customers with an existing ticket on a flight cancelled due to the administrative process – the opportunity to transfer their ticket free of charge to Virgin Australia’s 13 overlapping services,” EY said.
Low-cost airline Rex has declared bankruptcy and suspended flights between the capitals
The airline suspended trading on the ASX on Monday and on Tuesday evening it was confirmed that EY had been appointed as administrator.
‘Rex and Virgin Australia are also exploring opportunities to support regional customers, including Virgin Australia selling Rex regional services through codeshare or interline arrangements and making Velocity Frequent Flyer benefits available to Rex regional customers.’
Rex is the second major domestic airline to collapse in Australia this year following the demise of Bonza.
Rex is even more vital: it flies to some 56 destinations across the country and is a lifeline for some small regional communities.
Premier Anthony Albanese said on Tuesday the federal government was “concerned” about Rex and would assess its options.
But he also noted that the airline has already received “substantial support from the government without conditions.”
Transport Minister Catherine King said the government was in contact with the airline and monitoring the situation “hour by hour”.
Where Rex flies: The regional airline is a vital lifeline for regional communities and flies 56 routes
“Rex is trusted by Australians in the region,” he told Channel Seven’s Sunrise programme on Tuesday.
“It’s an incredibly important airline. In many cases, it’s the only one serving a number of small towns in the interior of the country and people rely heavily on it.
“We are taking this very seriously and are closely monitoring what is happening, following the situation hour by hour.”
Rex has built a solid reputation since its inception in 2002 and has become known for its reliability.
The Bureau of Transportation and Infrastructure Economic Research found in April that the airline canceled just one percent of its flights, outpacing all of its competitors.
The national carrier was internationally recognised at the World Airlines Awards in early July when it was awarded the title of Best Regional Airline in Australia/Pacific.
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