Federal Government could acquire collapsed Rex Airlines

AS a last resort, the Federal Government will acquire the collapsed Rex Airlines in a renewed effort to support aviation services for regional and remote communities.

As administrators make a second attempt to sell Rex, the government will initially focus on working with shortlisted bidders, offering potential support to increase the likelihood of a successful sale. 

The airline’s first sale attempt failed last year.

Any government assistance will be conditional on bidders committing to maintaining a “reasonable level of service” to regional and remote areas. 

“In the event there is no sale, the Albanese government will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations for a potential Commonwealth acquisition,” a government statement read.

Rex entered voluntary administration last year after a failed expansion into capital city routes proved financially disastrous.

The Federal Government has since provided extensive support to keep the airline’s regional services operational while its future is determined.

The government has provided an $80 million loan to the administrator to sustain regional flights until June 30 and bought out $50 million in debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited, making the government Rex’s primary creditor.

Prime Minister Anthony Albanese reaffirmed the government’s commitment to regional Australians.

“We are working collaboratively with Rex’s administrators to ensure regional services continue beyond June 2025, including exploring what support the Commonwealth can provide,” he said.

“Regional Australians can be assured that our government will continue to fight to keep these essential air services available.”

Transport Minister Catherine King said when markets failed or struggled to serve regional communities, the government had a role to ensure people do not miss out on opportunities, education, and critical connections.”

Opposition transport spokeswoman Bridget McKenzie declined to say last month whether the Coalition would support nationalising Rex. 

Until the 1990s, the federal government owned Qantas and one of Australia’s two major domestic airlines.