The 2025-26 Budget has landed with an explicit commitment from the federal government to acquire Rex should efforts to privately sell the embattled airline fail to manifest.
The Budget papers state “in the event there is no sale, the government will undertake work on contingency options in consultation with relevant states, including preparations if necessary for potential Australian government acquisition of Rex”.
Since Rex’s announcement of voluntary administration in July 2024, the federal government has guaranteed the company’s regional flight routes to enable to company’s core operations to continue.
The initial administration period was extended in November 2024 to June 2025.
Administrators announced a commencement of sale and/or recapitalisation in late February, but a buyer is yet to emerge.
Since the company entered administration is has sold off numerous assets including its Pel-Air air ambulance business to Toll Holdings for $47 million, its B737-800W/B737-700 flight simulator for $6.1 million and a Textron King Air 350C aircraft for US$7.3 million.
The Transport Workers Union (TWU) has strongly endorsed the commitment from the federal government to purchase Rex should no private buyer be found.
“The Federal Budget has delivered what regional communities and aviation workers desperately needed – a strong commitment to step in and secure Rex’s future if the market fails to deliver,” TWU National Secretary Michael Kaine says.
“This will maintain regional connections, recognising that essential national infrastructure requires public investment and oversight.
“After decades of aviation policy that privatised profits while socialising losses, the government is acknowledging what workers have long understood – some services are too important to be left for corporate vultures to pick at.
“We applaud this vital first step to secure Rex’s future. This should be built upon with comprehensive reform such as Safe and Secure Skies Commission.
“The commission would provide the regulatory framework needed to prevent the constant cycle of crisis and bailout that has characterised Australian aviation.
“The government’s commitment to potentially taking ownership of Rex aligns with global best practice, and deserves support across the parliament.”
The budget papers outline the government’s continued financial support for Rex during administration, including the previously announced $80 million loan to fund operations until June and acquisition of $50 million in debt.
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