The Australian government has signalled it could acquire embattled operator Regional Express (Rex) if its long-drawn administration yields no suitable buyer.
Canberra on 12 February says it will work with Rex administrator EY Australia “to ensure crucial regional aviation services” continue beyond 30 June, which is the closing date for a second sale process. A first sale attempt was unsuccessful, though parts of Rex’s business have been successfully sold off to private sector buyers.
The government says will work with shortlisted bidders “on what support [it] may be able to provide to maximise the prospect of a successful sale”.
“However, in the event there is no sale, the…government will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations necessary for potential…acquisition,” it states.
However, the government stresses that it is not in the sale process, and “would like to see a successful market-led outcome”.
If Canberra does acquire Rex – effectively nationalising the carrier – it would be the first time in 30 years the Australian government has a stake in an airline. In 1995, the government privatised Qantas through a public share sale.
Canberra is also waiving a “use it or lose it” rule on slots at Sydney airport, guaranteeing Rex has access to these slots until 24 October 2026.
The announcement comes after the Australian government extended an A$80 million ($50.4 million) loan to the airline to keep its routes in operation until 30 June. It also acquired A$50 million in debt from Rex’s largest creditor PAGAC Regulus Holdings earlier in the year.
Rex entered administration in July 2024 as its financial challenges mounted after an expansion into jet operations. While its Boeing 737 flights were grounded in July, the airline has continued its Saab 340 regional flights after the government agreed to guarantee these services.
Justifying the need for government intervention, Australian transport minister Catherine King says: “When markets fail or struggle to deliver for regional communities the government has a role to ensure people do not miss out on opportunities, education and critical connections. We are recognising that today and stepping in to keep these routes in the air.”
Meanwhile, Australian prime minister Anthony Albanese reiterated his government’s preference for “the private sector to be successful” in its bid to acquire Rex.
“To be very clear, we prefer for the private sector to be successful in a bid. What we are doing, though, is providing that certainty for regional communities that they won’t just be left abandoned, because that would create real issues for those local areas,” says Albanese, responding to questions at a doorstop interview in Merimbula, New South Wales.
