Rex Airlines, a key player in Australia’s regional aviation sector, has received creditor approval for a takeover by US-based Air T.Rex entered into voluntary administration in mid-July 2024. This decision comes on the heels of their growing indebtedness which has climbed to nearly $50 million. The proposed administration process raised alarm bells around the future of regional air travel in Australia. This has serious implications for communities that rely on Rex to do the service.
The regional airline, which flies a regional network connecting 54 small- and medium-sized Australian communities with larger hubs using Saab 340 turboprop aircraft, was hit hard financially. Rex supported pilot training at The Australian Airline Pilots Academy (AAPA). It ran the other aviation service provider Australian Aero Propeller Maintenance (AAPM). Moreover, it provided a Frequent Flyer program, Rex Flyer.
The deed of company arrangement was nevertheless approved by the creditors. This buyout is an attempt to ensure Rex’s regional operations can continue on without hiccups. Air T’s acquisition of Regional Express Holdings (Rex) is expected to finalize before Christmas 2024, offering hope to those dependent on Rex’s services in remote areas like Esperance.
Financial Challenges and Community Impact
Prior to entering into administration, Rex Airlines had acquired an impressive amount of debt. They had debts of about $440,000 to the Shire of Esperance and over $456,000 to the City of Esperance. Beyond that, the airline was deeply in arrears with a number of regional airports, Albany Regional Airport included.
The Australian government understands the value that regional airline services provide in connecting isolated communities. Rex’s operations are extremely important to regions such as Esperance. Finding a path to fiscal sustainability is critical to making sure residents and businesses in its service area can keep flying.
Michael Kaine, a representative from the Transport Workers Union, expressed relief at the decision:
“It will be a relief to regional Australia that these critical routes have a guaranteed future, after significant uncertainty at the airline that came only shortly after the collapse of Bonza.”
Air T’s Role and Future Commitments
Air T’s participation as the new owner has restored hope for Rex Airlines. Following a positive initial meeting with Air T, Kaine expressed optimism about fostering a constructive relationship with the new owners:
“After a positive initial meeting with Air T, we are hoping to continue a constructive relationship with the airline’s new owners, and to see commitments towards workers and regional Australia fulfilled.”
Still, some community members are skeptical about where services are headed in the long-term. Trevor Jenson voiced his concerns about route selections:
“I hope though that [Air T] doesn’t just focus on select routes.”
Greg Stocks, another local leader, emphasized the importance of maintaining quality service:
“We are very pleased we will continue to have a service. But we want it to be an excellent service.”
With some residents facing commutes over a hundred miles, regional operations are key to creating a safe and dependable system of transportation for all. As Ron Chambers noted,
“That can become a very long and also, at times, a fairly high-risk drive.”
Looking Ahead
Rex Airlines / Eastern Air Holdings prepares for its upcoming transition to Air T. Stakeholders are enthusiastic and optimistic that this new ownership will bring both increased service reliability and a real network expansion. The opportunity to run better operations is especially promising news for the regional communities that have long relied on regional air travel as a lifeblood.
