Rex (REX) has entered voluntary administration, which has led to the airline grounding some of its planned flights. Management of the third-biggest Australian airline has been locked in talks with the country’s government to find a solution. Some reports suggest that the authorities may be prepared to work out a package that would save part of the airline.
Rex Airline Enters Administration
The Rex services that have been grounded are the Boeing 737 flights between capital cities, including Melbourne, Sydney and Brisbane. While ticket sales for those routes are suspended, the company’s regional services are running normally, according to an update on Tuesday from administrators EY.
With Qantas and Virgin dominating the Australian air market, budget airline Bonza collapsed earlier this year. REX shares had lost over a third of their value since 2024 began, as it got caught up in a price war. The airline is the only provider of some regional services, and its expansion to national routes caused it to slash prices in an attempt to stay competitive.
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Virgin Australia (VAH) has stated it will book stranded Rex passengers on an equivalent service free of charge before August 14. Virgin Australia CEO Jayne Hrdlicka said:
This is a difficult moment for Australian aviation. It is also a reminder of the challenging nature of our industry.
The situation became clear after trading on REX shares was suspended on the Australian stock exchange on Monday, followed by the news on Tuesday that EY had been appointed administrator. REX lost $3.2m in the first six months of the 2023-24 financial year after a $16.5m loss in the six months before. Rising fuel costs are said to be one of the contributing factors to the company’s failure.
