The parent company of Rex Airlines has announced it has entered into voluntary administration, resulting in the grounding of all flights between major airports.
However, regional Saab 340 flights remain unaffected and will continue to operate.
Regional Express Holdings Limited filed for voluntary administration on July 30, appointing Samuel Freeman, Justin Walsh, and Adam Nitikins of Ernst and Young Australia as joint and several voluntary administrators by the Rex Group’s board of directors.
According to the Transport Workers Union, the administrators of Rex Airlines predicted as many as 850 jobs would go as a result of the latest development.
The airline’s fleet of Boeing 737s, used for major city routes, has been grounded, with Virgin Australia offering free rebooking to affected customers.
“Eligible customers will be re-accommodated on Virgin Australia flights as close as practicable to their original time of travel,” the airline stated.
“Holders of affected tickets should not come to the airport until they have rebooked their flights.”
Virgin Australia may also prove an ally to Rex in safeguarding regional flights, with the two companies discussing arrangements.
“Rex and Virgin Australia are also exploring opportunities to support regional customers, which include Virgin Australia selling Rex’s regional services through codeshare or interline arrangements, and making Velocity Frequent Flyer benefits available to Rex’s regional customers,” the company’s statement said.
“The administrators would like to thank Virgin Australia on behalf of impacted Rex customers and regional communities for its support during this difficult time.”
The move into voluntary administration follows the airline announcing an ASX trading halt.
“We are concerned about Rex. It’s an important regional airline. What we will do, though, is examine any proposals,” Albanese told reporters, adding the company already received “substantial government support” with no strings attached.
Albanese expressed concern that Rex had moved away from its traditional role as a purely regional airline when it started taking on routes between major cities.
“Rex, as a regional airline, provides important links with regional communities–and particularly between capital cities and regional communities–it is important for those local economies,” he said.
Rex Airlines was running flights between Sydney, Melbourne, Brisbane, Perth, and regional and country towns.
King indicated that the government was keeping a close eye on the situation.
“You know, we think Rex is a pretty important part of the Australian aviation industry and stand ready to work with them to see whether there’s any assistance or anything the government needs to do,” she said on ABC News Breakfast on July 30.
The announcement follows the collapse of the regional-to-city airline Bonza in June.
