Australia government buys debt to save struggling regional airline Rex, aiming to maintain connectivity

From Investing.com: 2025-01-23 03:51:00

The Australian government plans to buy A$50 million of debt from Regional Express Holdings’ largest creditor, PAG Asia Capital, to have more control during voluntary administration. This move aims to prevent liquidation and ensure connectivity in rural communities affected by Rex’s financial struggles.

Rex entered voluntary administration in July, owing about A$500 million to 4,800 creditors. The airline was unable to compete with Qantas and Virgin Australia, leading to job cuts and grounding of major city flights. The government previously provided a A$80 million loan to support Rex’s regional routes.

Transport Minister Catherine King and Finance Minister Katy Gallagher emphasized the importance of the government’s intervention to safeguard regional flight bookings and provide early access to entitlements for former employees. The move comes as administrators search for a suitable buyer for the struggling airline.

Australia’s workplace relations department has already paid out A$7.1 million in claims from former Rex employees, highlighting the impact of the airline’s financial challenges. The government’s efforts to support Rex’s operations aim to maintain connectivity in regional and remote communities across Australia.



Read more at Investing.com: Australia to spend another $31 million to save regional airline Rex By Reuters