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Australian airline Rex enters administration as finances plummet | National News
Australian regional airline Rex cancelled flights as it entered voluntary administration on Wednesday, leaving the fate of the country’s third-largest carrier in serious doubt.
The decades-old airline has called in administrators from Ernst & Young in a bid to avoid liquidation.
Administrators said flights between major cities — including Sydney, Perth and Melbourne — would be cancelled, but flights to regional communities would continue for now.
The regional airline, which started in 2002, prioritized connecting remote areas of the country to capitals with its 123 planes.
Like many airlines, Rex has been facing supply chain challenges — including a global pilot shortage — for several months and had reduced its routes ahead of the announcement.
Australia’s second-largest airline Virgin has offered to help Rex customers affected by flight cancellations, administrators said.
Transport Minister Catherine King said the government was not considering a blanket bailout for the airline.
“We know they will seek some support from the government, and it will take us some time to sort this out with the administrators,” she told the national broadcaster.
“We understand how important Rex is, especially for the regions. There are some areas where this is the only option in terms of transportation.”
Rex reported a loss of $2 million (AUS$3.2 million) in the first half of the 2023-24 fiscal year, compared with a loss of $10.7 million in the previous six months.
Australia’s domestic airline market is dominated by Qantas and Virgin Australia – together they have a 93.1 per cent market share, while Rex has five per cent, data from the national regulator shows.
Aviation expert Keith Tonkin said that while passenger numbers have returned to pre-pandemic levels, airlines around the world have struggled to rebuild maintenance and operations teams they were forced to lay off.
He added that many airlines had received government funding to stay afloat during the pandemic, which in most cases had now expired.
“Smaller airlines have managed so far, but now everyone wants to get paid and that cash flow is no longer happening. They can no longer be supported or sustained,” Tonkin added.
“That’s a natural consequence of being subscribed to or supported, and that support is now ending.”
Earlier this year, Australian budget airline Bonza was forced into liquidation and its more than 300 employees were told their employment contracts would be terminated.
Bonza made a splash when it launched in January 2023, promising a down-to-earth Australian experience with onboard craft beer, snags and a relaxed approach to crew uniforms.
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