Rex goes under: Regional Express Airlines grounds planes on capital city routes as administrators called in
Virgin Australia has agreed to honour prepaid bookings after upstart rival Regional Express abandoned its capital city ambitions and called in administrators.
Regional Express, which trades across Australia as Rex Airlines, revealed on Tuesday night it had grounded its high-cost fleet of Boeing 737 jets providing services between major national airports.
Administrators from Ernst & Young will oversee attempts by the group to deal with financiers and leasing companies owed upwards of $300 million and to focus back on Rex’s traditional strength in regional aviation.
This comes less than five weeks after Rex all but completed its major airport expansion ambitions by commencing services to Perth from Adelaide and Melbourne.
Rex’s Perth services were officially axed last night along with services between Melbourne and all state capitals.
But Rex said it would continue to operate its regional Saab 340 flights until further notice.
Virgin CEO Jayne Hrdlicka said it was offering immediate support to Rex.
Impacted Rex customers will be supported with rebooking on an equivalent Virgin Australia service free of charge. Customers will need to contact Virgin Australia before 14 August 2024 to take up this offer,” she said.
Rex customers with imminent travel in the next 48 hours should contact the Virgin Australia Guest Contact Centre on 13 67 89. Those travelling outside 48 hours should visit the Virgin Australia website to complete a rebooking form.”
Ms Hrdlicka also urged Rex staff who lost their jobs to visit Virgin’s jobs page and apply for any open positions.
“Recognising the importance for regional Australians to have access to a comprehensive domestic and international network, Virgin Australia also intends 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,” she added.
The administration comes less than five weeks after Rex launched flights between eastern capitals and Perth.
Rex earlier on Tuesday promised to make a “material announcement” about its financial woes as it grapples with more than $300 million of debts and troubles turning its post-COVID expansion into consistent profits.
Prime Minister Anthony Albanese told reporters the airline received “substantial government support with no strings attached”.
“One of the things that I expressed concern about was that Rex moved away from their traditional role of being a regional airline into flights from Sydney to Melbourne,” Mr Albanese said.
Rex currently operates 24 flights each week between Perth and Albany and 22 flights each week to Esperance.
Transport Minister Rita Saffioti earlier said the airline, which is also contracted to fly Monkey Mia and Carnarvon routes, was a “key player” in the regional market.
“We very much wanted to see them stay in WA because of the need for long-term competition,” she said.
Rex’s financial woes come three months after Gold Coast-based airline Bonza called in administrators after coming under intense pressure from its debt and private equity backers.
Rex has faced internal upheaval with longstanding chairman and major shareholder Lim Kim Hai being replaced in the top board role by his longstanding deputy John Sharp, a former Federal NationalJU Party politician and transport minister.
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