Australian Government rescues Rex Airlines with AU$50m debt acquisition

The Australian federal government has intervened to save Rex Airlines, acquiring AU$50 million in debt to prevent the airline’s collapse. The move ensures the continuity of essential air services to remote and regional communities across the nation.

Rex Airlines entered voluntary administration in mid-2024 following the failure of its expansion into capital city routes. The government’s acquisition of the debt from PAGAC Regulus Holdings Limited (PAG), Rex’s largest creditor, positions it as the principal secured creditor. This strategic action allows the government to collaborate with administrators to secure the airline’s future and maintain regional connectivity.

Catherine King, Minister for Infrastructure, Transport, Regional Development, and Local Government, emphasised the government’s dedication to supporting regional communities. She highlighted the critical role Rex Airlines plays in providing passenger, freight, and medical transport services to regional centres.

The airline’s financial challenges are significant, with administrators disclosing AU$500 million in debt owed to 4,800 creditors, including former staff, suppliers, and investors. To stabilise the situation, the government has provided additional financial support, including an AU$80 million loan to maintain operations, AU$7.1 million to cover entitlements for former staff and guarantees for ticket sales.

This intervention underscores the government’s commitment to preserving vital regional air links and ensuring economic and social support for remote communities. As discussions continue with administrators, the focus remains on safeguarding the services that connect Australia’s regional and remote areas with larger cities, supporting both passengers and essential services.