Australia regional airline Rex gets $53 mln government lifeline to keep flying
By Renju Jose
SYDNEY, Nov 12 (Reuters) -The Australian government said on Tuesday it would provide up to A$80 million ($52.6 million) to airline Regional Express Holdings REX.AX to help keep its regional routes running during an extended voluntary administration process.
Rex in July entered voluntary administration, Australia's closest equivalent to Chapter 11 bankruptcy, cut hundreds of jobs and closed its subsidiary that operated Boeing BA.N 737 flights between Australia's major cities.
Traditionally focused on servicing Australia's regional areas with small planes, Rex in 2021 began larger jet flights on the big city routes dominated by Qantas Airways QAN.AX and Virgin Australia but failed to dent their market share.
The company has continued using its fleet of ageing Saab 340 turboprop aircraft for regional flights after calling in administrators.
Administrators at Ernst & Young Australia said they intended to apply to the court for an extension of the voluntary administration through to June 30.
"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," the administrators said in a statement.
Employees of the regional business, who were made redundant during the voluntary administration period, will be paid their entitlements.
The financial support from the government and an extension of the voluntary administration would help to increase the number of operational aircraft, Ernst & Young said.
The government said the funding announced on Tuesday was "another demonstration of our commitment to maintaining regional aviation access, recognising the important role that Rex plays in regional communities right across Australia."
The Transport Workers' Union welcomed the government's financial support and urged authorities to buy a stake in the airline to guarantee regional routes and protect jobs.
($1 = 1.5214 Australian dollars)
Reporting by Renju Jose in Sydney; Editing by Jamie Freed
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
