Australia’s 3rd largest airline, Rex, has entered into voluntary administration. As a result Rex’s entire 737 fleet has been grounded.
The airline used 737’s to fly between Australia’s capital cities, while using Saab340 aircraft for regional operations. Rex has entered into an agreement for Virgin Australia to honour Rex’s cancelled prepaid tickets at no additional cost. The administrators are also looking at the possibility of Virgin selling Rex’s regional services through codeshare or interline agreement.
Speculation had been swirling around the airline after it entered a trading halt on the Australian Stock Exchange. This followed reports on the weekend that the company was looking at bringing in a turn around team from Deloitte. Earlier today reports were circulating that the airline would enter administration with EY being appointed as the administrators.
Some media reports indicated that some Rex staff were locked out of their hotels and staff Uber accounts due to unpaid bills.
Regional Express began in 2002 in the aftermath of Ansett’s collapse. Former Ansett subsidiaries Hazelton and Kendall were bought and merged to create Regional Express. Regional Express was later rebranded as Rex. The company only operated regional flights before they entered the inter-capital city market in 2021.
Earlier in the day Australia’s Transport Minister, Catherine King said the department had been having discussions with the airline. The minister told local media,
We’ll wait for Rex to make an announcement … but can I say very, very clearly, the government is in no doubt about the importance of regional aviation and Rex to regional aviation. We will work with Rex, we want to make sure that they have a future as part of aviation in this country, and we’re very determined to make sure that happens. We obviously don’t want to do that at any cost, we want to be involved very closely in what that future might look like.
There has been tension inside the board of the airline with former Executive Chair Lim Kim Hai being forced out in June. Lim is the airline’s biggest shareholder and has been pushing for his replacement, former Transport Minister John Sharp and three other directors to be removed from the board with a planned special shareholders meeting.
Rex holds a 5% share of Australia’s airline market. The administration comes after Bonza collapsed earlier this year.
Full information from rex can be found on it’s website: rex.com.au/AboutRex/OurCompany/DomesticFlightUpdates.aspx
Virgin itself entered administration in 2020, was sold and is now profitable.
Statement from Virgin CEO Jayne Hrdlicka
This is a difficult moment for Australian aviation with Rex entering voluntary administration and announcing the immediate suspension of its 737 jet operations. It is also a reminder of the challenging nature of our industry.
Our team is now moving quickly to support Rex’s customers and people.
Impacted Rex customers will be supported with rebooking on an equivalent Virgin Australia service free of charge. Customers will need to contact Virgin Australia before 14 August 2024 to take up this offer.
Rex customers with imminent travel in the next 48 hours should contact the Virgin Australia Guest Contact Centre on 13 67 89. Those travelling outside 48 hours should visit the Virgin Australia website to complete a rebooking form.
Virgin Australia is also offering support to Rex employees who may be impacted by today’s announcement. People whose employment has been affected should visit the expression of interest form on our website to apply for open positions.
Recognising the importance for regional Australians to have access to a comprehensive domestic and international network, Virgin Australia also intends to partner with Rex’s regional business to enable seamless access to Virgin Australia’s domestic and international destinations through potential codeshare or interline arrangements in the future.
The team at Virgin Australia are thinking about everyone at Rex today, an airline with a proud and important role in Australian aviation, particularly for regional Australia.
