Australian regional carrier Rex Airlines announced that it has entered voluntary administration just weeks after its former chairman pushed to eject the company’s entire board after being voted out of his role.
The announcement was made on July 30, 2024 by accounting and consulting firm Ernst and Young Australia, which was appointed Joint and Several Voluntary Administrators by the Rex Group’s respective boards of directors.
“A voluntary administration is a process that companies undertake to restructure their operations,” Sam Freeman of Ernst and Young said in a video clip posted by Rex on social media platform X (formerly Twitter).
Freeman went on to say that Rex regional flights on the Saab 340 aircraft are currently unaffected and will continue to operate.
“The Rex Group has a long and proud history of servicing regional and remote communities across Australia and the administration provides the process to continue that legacy,” Freeman said.
As of July 30, 2024, Rex flights between major airports have been canceled, with the group’s domestic fleet of Boeing 737 aircraft all grounded.
Rex also said Virgin Australia has made an offer for its customers with an existing ticket on a flight canceled due to the administration process the opportunity to transfer their ticket free of charge to the following overlapping services:
- Melbourne (MEL) – Adelaide (ADL)
- Melbourne (MEL) – Canberra (CBR)
- Melbourne (MEL) – Brisbane (BNE)
- Melbourne (MEL) – Coolangatta, Gold Coast (OOL)
- Melbourne (MEL) – Hobart (HBA)
- Melbourne (MEL) – Sydney (SYD)
- Melbourne (MEL) – Perth (PER)
- Sydney (SYD) – Brisbane (BNE)
- Sydney (SYD) – Coolangatta, Gold Coast (OOL)
- Sydney (SYD – Adelaide (ADL)
- Brisbane (BNE) – Adelaide (ADL)
- Adelaide (ADL) – Perth (PER)
- Brisbane (BNE) – Cairns (CNS)
Holders of affected tickets are advised to not go to the airport until they have rebooked their flights.
Rex also said that, along with Virgin Australia, the company is 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.
According to a report by Australian Aviation, Virgin Australia has agreed to take over the leases of three of Rex 737s, stating that the aircraft will be used to support Virgin Australia’s existing published schedules.
The scenario has turned the tables on Rex, which took over the leases of Virgin Australia’s old aircraft during the COVID-19 pandemic.
Qantas invites Rex employees to apply
Meanwhile, Australian flag carrier Qantas said in a statement that it was “sad” to see Rex go into voluntary administration and that it is ready to assist Rex’s customers and employees.
Addressing Rex employees, Qantas said that those who would like to explore opportunities within Qantas or Jetstar are welcome to apply. The carrier also set up a dedicated link for applicants to submit an application or enquiry.
In May 2024 Rex announced the launch of new service routes to major cities such as Melbourne Airport (MEL) to Perth Airport (PER), and PER Airport to Adelaide Airport (ADL). The carrier also signed an interline agreement with Abu Dhabi-based carrier Etihad Airways in March 2024.
News of Rex entering into administration comes almost three months after low-cost Australian carrier Bonza suspended its operations.
Cost of living taking its toll on businesses
Dr. Paul Strickland, a Senior Lecturer on Tourism, Hospitality and Event Management at La Trobe Business School in Melbourne, attributes the airlines’ collapse to increasing costs.
“The impact of the cost of living is taking its toll on companies which have little margins such as Bonza and Rex. Aviation fuel, plane maintenance and the cost of daily operations are all increasing, putting pressure on an industry that is still struggling after the COVID-19 pandemic. Simply charging a higher ticket price is not the solution long term,” Strickland said in a statement emailed to AeroTime.
Strickland added: “It is the Federal Government’s responsibility to ensure essential services to regional communities but that does not necessarily extend to the aviation industry. Support packages are welcomed but not a long-term solution.
“The only way the aviation sector can guarantee services is if the government owns a controlling share of the airline,” Strickland further said.
The Rex Group was formed in 2002, and is essentially the merger of its two regional carriers, Hazelton and Kendell Airlines. Although part of the Ansett Group, these two passenger airlines had been operating largely as separate businesses until their merger under Rex. It commenced operations on August 2, 2002 with 21 Saab 340 aircraft and 7 Metroliner 23 aircraft.
