Rex will remain in the air until at least the EOFY if an extension of the voluntary administration is approved. Photo: File.
The embattled Regional Express Airline (Rex) has been thrown an $80 million lifeline by the Federal Government to keep them flying until after next year’s federal election.
The Labor government has delivered the funds to administrator Ernst & Young Australia (EY), which has requested an extension of the process until the end of the financial year.
Rex went into voluntary administration in late July and Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King has been working with administrators to ensure essential connectivity to regional and remote communities.
She said the move would ensure that Rex’s regional routes continue during an extended voluntary administration process and former employees of the business will be granted early access to entitlements.
“Today’s announcement is another demonstration of our commitment to maintaining regional aviation access, recognising the important role that Rex plays in regional communities right across Australia,” she said.
“Rex’s administration process is progressing, with the recent sale of Pel-Air Aviation Pty Limited to Helicorp Pty Ltd, part of Toll Aviation, with proceeds from the sale being used to repay secured creditors.
“The financing will support the business to continue offering critical services for regional communities, with Rex’s administrators intending to apply to the Federal Court of Australia to extend the Voluntary Administration to 30 June 2025.”
Ms King confirmed that the Government would continue to guarantee ticket sales made throughout the Voluntary Administration period if the extension is granted.
EY administrator Sam Freeman told the Australian Financial Review that the extension would allow for a strategic overhaul of the operation.
“As we’ve demonstrated throughout the voluntary administration – an extension will not disrupt the continued operation of the regional network, which is such a critical part of regional and rural Australia’s connectivity,” he said.
“The actions to be undertaken in the extension period are expected to enhance the network.”
The Transport Workers Union (TWU) welcomed the announcement and called on the Federal Government to ensure regional jobs and services by taking a stake in the airline.
“This is a positive announcement for the redundant workers whose entitlements have been in limbo, as well as for regional Australia’s business, tourism, healthcare and community services,” TWU National Assistant Secretary Emily McMillan said.
“In October, polling showed there is overwhelming support in Australia for the Federal Government to intervene and keep Rex flying.
“There are hundreds of jobs still on the line, and there is a clear mandate here for the government to step in and safeguard critical aviation routes and protect those jobs by taking a stake in the airline.”
Ms McMillon said there was a need for a long-term solution in the form of an independent commission.
“The insatiable profit focus of privatised airlines and airports is failing regional Australia and aviation workers,” she said.
“A Safe and Secure Skies Commission would ensure stability for the industry and give certainty to workers, businesses and regional communities.”
Original Article published by Chris Roe on Region Riverina.
