Rex gets $80m from Feds to keep flying

The Labor government has provided an $80 million loan to sustain Regional Express (Rex) and keep its regional routes operational until after the 2025 federal election. Transport Minister Catherine King and Employment Minister Murray Watt said in a joint statement on Tuesday that this funding will allow Rex to continue "critical services for regional communities. "

Mayor Marcus Blackie welcomed the funding news. “Senator Urquhart phoned me immediately after the announcement by the Prime Minister in Tasmania on Tuesday, knowing how important the continuation of Rex is, specifically to King Island, especially as our peak 24-25 summer tourist season approaches. 

"Therefore, I again encourage all to now forge ahead on their upcoming travel plans with this added certainty, as well as the Federal Government continuing to guarantee Rex forward bookings. 

"This should restore significant confidence for all King Island residents, visiting tourists and our businesses moving forward. After the trials of 2024, this is more welcome great news for our embattled island, so we’ll take it! 

"As Council is a creditor of Rex (under administration) we will eagerly attend the next creditors meeting to try and shape (and vote for where possible) a longer-term solution that will see Rex reborn and able to grow air services to King Island in the years ahead”.

Rex entered voluntary administration in July. with debts of more than $500-million and grounding its fleet of Boeing 737s operating between major metropolitan centres. More than 600 workers were made redundant.

 Administrators Ernst & Young Australia (EY has requested an extension of the administration period to June 30, 2025, If the application is granted the government will continue to guarantee ticket sales made through the administration period to that date. “The guarantee has been effective so far, and has yet to be used with flight bookings holding up well,” the ministers said.

Samuel Freeman of EY stated that the government financing facility enables them to support regional communities through an extended administration period. “The extension we are requesting will help us to build a strong network for regional Australia, enabling us to continue to operate the regional network while undertaking a business improvement plan to reposition the business for sale,” Mr Freeman told the Australian Financial Review. “The strategic overhaul” includes plans to expand the operational fleet, provide stability for the Rex team, and invest in growth initiatives to boost reliability and capacity on regional routes.

The funding also ensures early access to entitlements for former Rex employees, with Fair Entitlement Guarantee distributions for those made redundant during the administration. “This will ensure that extending the Voluntary Administration period does not delay the ability of these employees to access their entitlements,” Ms King and Mr Watt said. Meanwhile, the sale of Rex’s regional network continues, with administrators focused on securing creditor returns while maintaining essential regional services.