REX: Prospective sale to Air T gives relief for regional flyers

For many Australians who live in rural and remote communities, Regional Express Airlines (Rex) isn’t just a name in the schedule; it’s a vital lifeline.

So when news broke that a buyer had been found for the airline, which entered voluntary administration in July 2024, it was worth paying attention to.

What is happening

Rex slipped into voluntary administration after mounting debts and expansion baggage, including its move into the capital-city market, competing with the likes of Qantas and Virgin Australia. A buyer has now emerged: the United States–based aviation services firm Air T.

Administrators have entered into a ‘Sale and Implementation Deed’ with Air T. The deal is still subject to final creditor approvals and regulatory conditions, but the timeline is expected to move quickly.

Why this is important

It ensures that many regional routes will be maintained even the uneconomic ones that require government subsidy.
The Australian Government, which has bought into the airline emphasised that future support hinges on commitments to maintain a “reasonable level of service” to regional and remote communities. For people in smaller towns, that kind of guarantee can make the difference between a multi-hour drive to a capital city, or a quick flight.

Fleet stability and maintenance

One of Rex’s major issues is an ageing fleet of turboprops. Specifically its 57-strong mix of Saab 340B and Saab 340B Plus aircraft. Air T brings strong capability in maintaining such regional aircraft into the deal. It has access to parts and a maintenance supply chain that fits Rex’s needs. For passengers, that means fewer mechanical-related disruptions and potentially more reliable schedules.

The fine print

Creditors and shareholders are expected to take a hit. For instance, no return is anticipated for shareholders, including poor me. Some 4,000 creditors also remain to be informed of what, if anything, they will receive.

The sale is subject to standard conditions (creditor votes, regulatory approvals), and the deal is not guaranteed until then.

While Rex will focus on regional markets, don’t expect any major-city routes to be reinstated. Qantas, Jetstar and Virgin will be able to maintain their margins on those capital city routes

2PAXfly Takeout

This isn’t just aviation corporate news for regional Australians and those flying into the less-travelled corners of this country. It’s about access, continuity and making sure your flight is reliable when you need it. Looking forward, that lifeline looks a little stronger.

Although it ensures the airline’s immediate survival, this deal alone doesn’t answer questions about its long-term future. That will be determined by Air T’s vision for Little Ole Regional Express.

My wish is that they will pump capital into the airline so that it can renew its fleet to more contemporary and efficient aircraft. I would also hope for the airline’s expansion to become more profitable, eventually trying again to compete with the big boys on capital city routes. But this time, with more competence and unified leadership, and definitely not with a board that fights with itself.