The government has intervened to save regional airline Rex after it plunged into voluntary administration, with debts of about $500million.
Transport Minister Catherine King announced government funding for the airline on Thursday afternoon to give certainty to regional travellers.
‘Rex’s continuation is in the best interests of Australia, and the government is working closely with the administrators to ensure a strong regional aviation presence now and into the future,’ she said in a statement.
The guarantee ensures that if any Rex Airlines bookings to or from a regional destination are canceled during the administration period, passengers will receive a full refund.
It includes all regional flight booking after Rex entered voluntary administration at 9.31pm on July 30.
Along with financial support, Ms King said her department would continue working with the administrator, EY, on plans for the continuation of the airline.
‘We also expect the administrator to honour and prioritise the entitlements of Rex employees,’ she said.
‘This guarantee is a message to regional Australia that we know how important reliable air services are to you and that we are not going to allow your communities to be left behind.’
EY partner Sam Freeman said he was grateful to the government for extending a lifeline to the regional carrier.
‘The guarantee will help Rex to keep flying while we undertake the recapitalisation of the airline and secure its future,’ he said.
‘We’re currently undertaking a process to find an investor committed to a sustainable commercial regional network.’
Mr Freeman told creditors last week that Rex’s debts amounted to about $500million owed to lessors, airports, refuellers, staff, and tens of thousands of airline customers.
It was also unable to pay about 600 employees final wages and entitlements after they were fired.
