Administrators for Regional Express (Rex) will increase the Australian carrier’s operational fleet under a business improvement plan made possible after the government agreed to extend its financial support of the carrier.
Rex entered administration at the end of July as its financial challenges mounted after an expansion into jet operations. While its Boeing 737 flights were immediately grounded, the airline has continued its Saab 340 regional flights after the government agreed to guarantee these services.
Australia’s transport minister Catherine King on 12 November says the government has agreed to provide up to A$80 million ($53 million) in financing and extended its flight-booking guarantee to enable to Rex to continue flying during an lengthened administration process.
Administrators will now seek an extension of the current voluntary administration until the end of July next year.
“This will give regional aviation the best chance of a sustainable future,” King says. “The administration is progressing well and Rex’s regional flights are continuing to operate as normal.
”While our government’s guarantee remains in place, it has yet to be used and flight bookings are holding up.”
Sam Freeman, from the Ernst & Young Australia team overseeing the airline’s administration, says the financing facility and extension will be used to invest in a business improvement programme to help position the airline for sale.
“We’re planning to increase the size of the operational fleet, while providing greater clarity for the Rex team and investing in strategic growth initiatives,” he says. “Through this plan, we’re looking to increase reliability and capacity on the regional routes.”
Administrators argue the continued trading of the business and investment in the business improvement plan are expected to secure a greater return for creditors and continued services for the region.
Last month administrators secured the sale of the group’s Pel-Air ambulance business to logistics company Toll Holdings.
