Troubled regional airline Rex has found itself facing a lifeline after the federal government allocated up to $80 million to maintain its regional routes.
The context: Rex after its fleet of Boeing 737s operating between major metropolitan centers was grounded.
Its management was handed over to administrators EY Australia, while Rex’s regional services continued as a buyer or financial lifeline for the airline.
Transport Minister Catherine King and Labor Minister Murray Watt announced Tuesday the government would provide up to $80 million and grant early access to rights to former Rex employees.
The money will support the continuation of essential services for regional communities, they said in a joint statement.
What else to know: Rex administrators plan to ask the Federal Court to extend the voluntary administration until June 30, 2025.
If the request is accepted, the government will continue to guarantee the sale of tickets throughout the administrative period until that date.
“The guarantee has been effective so far, but it has not yet been used as flight bookings have held up well,” the ministers said.
More than 600 workers were laid off when it was revealed Rex was struggling under the weight of $500 million in debt.
In August, the federal government on regional flights, but resisted calls for a bailout.
