Keep Booking Flights on Rex, Travellers Urged

The administrators of regional airline Rex are urging wary travellers to keep booking flights despite concerns about the company’s viability.

A man looks on as a Rex plane takes off from Sydney Airport in Sydney, Australia, on Jan. 20, 2024. Jenny Evans/Getty Images

The administrators working to rescue the five companies in the Rex Group are urging travellers to keep booking with the airline despite its precarious financial position and doubts about its viability.

Last week, a meeting of creditors was told the airline is about $500 million in debt, and administrators had launched an asset sale and buyer search, hoping to keep it flying.

In February, Rex reported a net loss of $3.2 million (US$2.1 million) for the first half of the 2023/24 financial year after it changed its focus in 2021 from a regional service to capital city routes in competition with Qantas and Virgin.

A pilot shortage created “sub-optimal fleet utilisation,” and the airline suffered from supply chain issues and maintenance problems.

In July, its fleet of Boeing 737s—which served the metropolitan routes—was grounded as the company went into administration, but regional flights continued running using its fleet of ageing Saab 340 aircraft.

Since then, Rex has transported more than 20,000 passengers on 600 flights.

At the time, a spokesperson for administrators EY said the aim was to “restructure the business so it can continue to service regional Australia.”

Private Equity Keeping Planes In the Air

Rex’s regional flights are being underwritten by ongoing funding from private equity firm PAG Asia Capital, but its long-term future remains unclear amid calls for a federal government bailout.

EY partner Samuel Freeman reassured travellers that they could still confidently book on Rex while the administrators were in charge.

“We’re saying to Australians, keep booking with Rex, the administrators are in control of the business and are overseeing its operations,” he told ABC.

“We have demonstrated since the appointment that the Rex planes are getting people where they need to go to and we’ve secured funding to enable us to continue to do so in the administration period.”

The creditors’ meeting was told the airline was negotiating with key government members in Canberra, and that they have said they will back Rex as long as it prioritises regional flights.

Jobs at Risk

At stake are not only the 1,000 remaining jobs—600 were lost when the administration was announced—but also the future of a vital link between regional towns.

Freeman said he expected the airline’s value to be “maximised” in any sale and that employee entitlements would be addressed in that process.

The Transport Workers Union wants the federal government to take an equity stake in the airline to secure the remaining jobs and protect the regional transport links.