Rex Airlines news: Flights between major airports cancelled as airline plunges into administration

Rex Airlines has announced it has gone into voluntary administration and cancelled all flights between major airports.

A statement posted on Rex’s website late on Tuesday said Regional Express Holdings Limited and a number of its subsidiaries under the Rex Group have entered voluntary administration.

Ernst & Young Australia have been appointed administrators.

The statement said regional Saab 340 flights were unaffected and will continue to operate, but domestic 737 services have been halted with Virgin Australia offering affected Rex passengers free rebooking.

‘Flights between major airports have been cancelled, with the Rex Group’s domestic fleet of Boeing 737 aircraft all grounded,’ the statement said.

‘Affected customers are being contacted directly by Rex.’

The statement said Rex and Virgin Australia were exploring opportunities to support regional customers, including Virgin selling Rex’s regional services through codeshare or interline arrangements, and making Virgin frequent flyer benefits available to Rex’s regional customers.

Virgin Australia chief executive Jayne Hrdlicka said it was ‘a difficult moment for Australian aviation’.

‘Our team is now moving quickly to support Rex’s customers and people,’ she said in a statement after Rex’s announcement.

‘Impacted Rex customers will be supported with rebooking on an equivalent Virgin Australia service free of charge.’

Virgin was also offering to support affected Rex employees who could apply for open positions via the airline’s website, she added.

Ms Hrdlicka said Virgin intended to partner with Rex’s regional business to enable ‘seamless access’ to Virgin Australia’s domestic and international destinations through potential codeshare or interline arrangements in the future.

‘The team at Virgin Australia are thinking about everyone at Rex today, an airline with a proud and important role in Australian aviation, particularly for regional Australia,’ she said.

Rex employs about 2,000 people.

It began servicing Sydney-to-Melbourne, one of the busiest routes in the world, in 2021.

Regional Express’s shares had gone into a trading halt on the Australian stock exchange following recent boardroom turbulence and multimillion dollar losses.

An announcement had been expected by the opening of trade on Wednesday.

The trading halt followed reports Rex called in consultancy firm Deloitte to review the airline’s books.

Earlier on Tuesday, the prime minister had questioned the carrier’s expansion into major city routes.

He said he would consider proposals to save Rex but the airline received substantial public funding with ‘no conditions attached’.

‘One of the things I expressed concern about was having no conditions so Rex, for example, moved away from their traditional role of being a regional airline into flights, for example, from Sydney to Melbourne,’ Mr Albanese told reporters.

Nationals senator Bridget McKenzie had said Rex launching flights, including a recent Melbourne-to-Perth route, inspired competition with major aviation players which often resulted in cheaper fares.

Virgin Australia has offered passengers scheduled for Rex domestic 737 services free rebooking

‘Let’s not continue to pretend that Qantas’s behaviour is acceptable in the aviation industry,’ Senator McKenzie said.

‘Every time they are challenged they seek to monster those airlines like Rex … who have sought to actually give Australians another way of travelling.’

Unlike Bonza, which went into voluntary administration in April, Rex mainly owns rather than leases its planes.

Its key fleet comprises 61 SAAB 340s and seven leased Boeing 737-800s, out of 123 aircraft.

Many regional communities rely on the carrier, which emerged 22 years ago following the collapse of Ansett.

In the central west NSW hub of Orange, Mayor Jason Hamling said he was grateful his community had multiple carriers including Qantaslink and Link Airways.

Since COVID-19, Rex has struggled with profitability. In February, it reported a bottom line net loss of $3.2 million for the first half of the 2023/24 financial year.

Rex shares last traded at 56.5 cents on Friday. They were at 79 cents a month ago.