Govt buys $50m worth of debt to keep Rex flying
The federal government has thrown embattled regional airline Rex another lifeline as it buys up $50 million of the carrier’s debt.
The purchase will ensure regional communities stay connected and will keep access to essential medical and freight services.
“The Albanese government is ensuring Rex Airlines regional services will continue, supporting the administrators on next steps,” Transport Minster Catherine King said in a joint statement with Finance Minister Katy Gallagher on Thursday.
Rex went into administration in mid-2024 with about $500 million in debts, after a push into Australia’s most competitive routes dominated by Qantas and Virgin.
The debt purchase will make the government Rex’s principal secured creditor and it will seek to become a voting member on the committee of inspection.
“These actions preserve important economic, medical and freight services, supporting regional liveability and regional economies,” the ministers said.
It is the second lifeline extended to the battled airline in a couple of months.
Late last year, the government provided a $80 million commercial loan to Rex’s administrators to keep regional routes open, cover early entitlements for former workers and to guarantee tickets for regional routes.
In December, the corporate regulator announced it would take Rex and four directors to court over continuous disclosure breaches for failing to reveal a $35 million shortfall until days before the financial year ended.
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The TWU said the announcement is a step in the right direction to ensure Rex can keep flying and so that aviation jobs are protected, but must be followed up by an equity stake to ensure long-term stability.
TWU National Secretary Michael Kaine said that Rex is a lifeline to regional Australia: essential for healthcare, tourism, business and connecting families.
“Just in the last few years we’ve seen the collapse of Bonza and Tigerair, casualties of an industry where executive bonuses are easily guaranteed, but not decent standards for workers and passengers,” Kaine said.
“This short-term profit focus of privatised airlines and airports has seen this critical industry sharply decline.”
