The Australian government has provided an additional A$60 million ($39.1 million) in commercial loans to Regional Express (Rex).
The move, announced by transport minister Catherine King, comes as Canberra restructures the beleaguered operator’s debt, follow its successful sale to US-based Air T in late October.
King says about A$90 million of Rex’s existing debt will be carried forward. The A$60 million loan is on top of the A$50 million contribution by Minneapolis-based Air T to recapitalise Rex.
“In exchange for this financing and to ensure value for taxpayer money, Air T has agreed to a range of commitments aimed at preserving essential regional aviation connectivity and improving governance arrangements,” the minister adds.
The funding is on top of the A$30 million loan Canberra provided earlier this year to maintain regional operations until a suitable buyer was found.
At the same time, the Australian government will “retain its security” over Rex’s fleet and simulators, “to safeguard this public investment”.
This means that Rex’s fleet of over 50 Saab 340s “cannot be sold” without Canberra’s permission.
The airline entered into voluntary administration in July 2024 amid mounting financial challenges after an expansion into jet operations.
A first sale process in 2024 by administrators Ernst & Young (EY) yielded no successful buyers. Canberra had previously floated its intention to acquire Rex should a second sale process in 2025 yield no suitable buyers.
However, in June this year, EY confirmed several “interested parties” in the sale process. By October, Air T emerged as the successful buyer of Rex’s operations.
Separately, Canberra will also be providing up to A$5 million in funding for regional and remote airports that supported Rex operations through its voluntary administration process.
“This new programme will mitigate financial barriers to these organisations continuing to provide essential services to their communities. Eligibility will be based on the amount owed to the organisation by the Rex regional business when it entered voluntary administration,” King adds.
