Rex Airlines Enters Voluntary Administration Amid Job Cuts

Rex Airlines has recently announced that it is entering voluntary administration after struggling to compete on major routes against bigger airlines. While flights between major cities have been halted, the regional services are still up and running.

The Transport Workers Union has reported that administrators expect up to 610 jobs to be lost across the airline. The company’s fleet of Boeing 737 jets, which have been used for flights between capital cities, has been grounded as a result of the financial turmoil.

A statement was released on Rex’s website, confirming that Regional Express Holdings Limited and some of its subsidiaries had entered voluntary administration, with EY appointed as the administrators. However, the good news is that the regional Saab 340 flights will continue to operate.

Virgin Australia is stepping in to help customers affected by the halted capital city services, offering them free rebooking options. Rex is also reaching out directly to those impacted to provide assistance.

An administrator from EY stated that the goal is to restructure the business so Rex can keep servicing regional Australia. Further updates on how many staff will be affected will be released in the coming days.

This announcement came after a suspension of share trading amid concerns about Rex’s financial future. Reports indicated that the airline had engaged with consultants to help develop a rescue plan.

Despite these challenges, Virgin Australia has expressed that it will prioritize jobs for those Rex employees who have been affected. They are even planning to take on some flights from the Rex fleet.

Some Rex staff have shared their struggles, claiming they’ve been locked out of hotel accommodations because of unpaid bills from the airline, and several have been unable to use company accounts due to payment issues.

The airline, which had tried to break into the lucrative market for capital city routes, has reported significant losses, blaming a shortage of pilots and engineers, alongside other post-pandemic challenges. This situation isn’t new, as Rex had already cut back services from several regional cities earlier this year.

The Prime Minister has mentioned that Rex is an important airline, emphasizing the need for regional access to aviation. He has signaled a hopeful outlook for the airline’s recovery.

Federal Transport Minister Catherine King has also indicated the government’s willingness to support Rex, but in a measured approach, ensuring it’s not at any cost.