The Australian government has stepped in to support regional airline Rex Airlines by acquiring $50 million of its debt from primary creditor PAGAC Regulus Holdings Limited. This intervention seeks to prevent Rex’s liquidation, which would adversely affect remote communities dependent on its services. After entering voluntary administration on June 30 last year, Rex has been struggling for its commercial survival, with Ernst and Young overseeing the administration process.
Transport Minister Catherine King and Finance Minister Katy Gallagher announced the government’s plans earlier today, stating the acquisition positions the government as the principal secured creditor. This move aligns with the government’s commitment to maintaining aviation services crucial to regional economies. Although attempts to find a buyer for Rex’s regional operations were unsuccessful, the government continues to collaborate with the administrators during the ongoing process.
Through an $80 million commercial loan and associated measures, the government is also providing guarantees for ticket sales until June 30, ensuring refunds are covered for cancelled flights.
Moreover, former employees have started receiving compensation under the Fair Entitlements Guarantee, with over $7.1 million disbursed to date. The overall aim is to sustain vital transport links and contribute to regional livability and economic stability.