The Prime Minister has acknowledged his concerns about the future of Rex (Regional Express) after the airline paused trading on the stock exchange. It’s prompted the question: Is Rex going out of business?
The carrier has also disabled some online bookings.
It comes after budget airline.
The carrier has been operating services to and from regional parts of Australia since 2002.
The Transport Workers’ Union (TWU) has warned 2,000 jobs are at risk if Rex does not survive.
Rex airline
Rex launched after two regional airlines, Hazelton and Kendell, merged in 2002.
It became a publicly listed company on the Australian Securities Exchange (ASX) three years later.
The company has described itself as operating on “a belief that the bush needs and deserves an air service of quality” to connect regional communities and bigger cities.
Rex is Australia’s only major commercial domestic airline not owned by.
Troubles
Rex has been struggling to recover from disruptions caused by COVID-19. In the 2022/23 financial year, the airline reported $30 million in losses.
This year, the company’s board has undergone major reshuffles — its executive chairman and several directors resigned.
This week, Rex’s ASX share price dropped to its lowest value since the start of the pandemic.
Trade pause
On Monday, Rex announced an ASX— a temporary freeze on anyone buying or selling its shares.
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The announcement was made ahead of markets opening on Tuesday.
Rex flagged another announcement on its future would be made on Wednesday, at the
Uncertainty
The TWU represents workers in the airline industry. It said thousands of workers “have been thrown into limbo“ by the uncertainty surrounding Rex.
National Secretary Michael Kaine described Rex as “another victim“ of an “unregulated” industry and said the TWU would support efforts to save it.
It comes less than a month after Bonza went into liquidation. Bonza entered voluntary administration in April. It was Australia’s first low-cost independent airline to launch in 15 years when its services began in January 2023.
Other airlines
Australia’s second biggest carrier, Virgin, faced restructuring after the airline collapsed at the start of the pandemic in 2020.
Administrators from the professional services firm Deloitte were tasked with rescuing the business.
Virgin Australia was sold to a U.S. investment firm, which helped save the airline.
Australia’s national carrier, Qantas, received more than $2.7 billion in government funding after it faced similar uncertainty during the early pandemic.
Government reaction
Prime Minister Anthony Albanese said he was “concerned” about Rex’s future due to its “important” role as a regional carrier.
He did not rule out a ‘bailout’ option for Rex, where the Government would provide the carrier with extra funding to keep it afloat.
Shadow Transport Minister Bridget McKenzie urged the Government to “not allow a repeat of Bonza”.
