The Federal Government has taken on over $50 million of Rex Airlines’ debt.

Transport Minister Catherine King and Finance Minister Katy Gallagher say the debt was acquired from PAGAC Regulus Holdings Limited to prevent Rex from liquidation. 

They said the move is part of an “ongoing commitment to maintaining access to aviation services for regional and remote communities”.  

Rex Airlines has been under voluntary administration since June 30, 2024, with Ernst & Young (EY) appointed as administrators. 

The Federal Court extended the administration period until June 30 this year, giving EY time to restructure the airline and secure a buyer for its regional operations.  

“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,” said EY administrator Samuel Freeman.

In addition to assuming debt, the government has loaned Rex $80 million, guaranteed ticket refunds for cancelled flights, and expedited $7.1 million in entitlements for former employees. 

The airline’s ambulance service, Pel-Air, was sold for $47 million to Toll Logistics, with further asset sales ongoing.  

The government insists these measures safeguard vital services for freight, medical transport, and regional liveability. 

Ms King noted that while a 2024 sale attempt failed to find credible buyers, efforts to secure Rex’s future remain a priority.  

“This allows for the administrators to undertake a second sale process,” King said, adding the government aims to recover the debt through the eventual sale.  

The intervention has drawn support from both sides of politics. 

Opposition Leader Peter Dutton backed the decision, citing the importance of maintaining competition and regional connectivity. 

While the move ensures Rex’s short-term survival, economists say it also reflects political considerations, including this year’s federal election and the importance of regional seats.

Whether a buyer emerges during the extended administration period will determine the long-term outcome for the regional carrier.  

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