Rex Airlines snapped up by US company
Regional airline Rex has found a US buyer after plunging into administration in July last year. Rex runs multiple services from Adelaide, Mount Gambier and Port Lincoln.
Regional airline Rex has a US buyer, the announcement on Tuesday night coming more than a year after the airline that operates numerous services in South Australia entered voluntary administration.
Air T — a Nasdaq-listed US aviation business that runs cargo services, an aircraft trading business and sells parts – has entered a sale and implementation deed with Rex administrator EY.
“The sale and implementation deed is subject to customary conditions precedent for a transaction of this type including receipt of regulatory approvals and approval by creditors,” the administrators’ announcement said.
The federal government has been propping up the airline to ensure regional and remote communities remain serviced, buying $50 million in debt and loaning up to $80 million.
Transport Minister Catherine King said Tuesday’s announcement marked a positive step toward bringing the airline out of voluntary administration.
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“This will allow Rex to keep flying and maintain critical aviation links for regional communities,” King said.
Rex plunged into voluntary administration in July 2024, after a failed bid to compete with rival airlines on capital city routes. It operates numerous services in South Australia from Adelaide, Port Lincoln, Coober Pedy and Mount Gambier airports.
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The announcement follows an incident at Adelaide Airport earlier this month when a Rex Airlines flight bound for Broken Hill was forced to return to the terminal.
In a statement, Rex Airlines said flight ZL4818 operating from Adelaide to Broken Hill experienced a cockpit indication associated with the aircraft’s left engine during take-off.
One worried passenger told how he saw smoke after unburnt fuel ignited in the engine’s exhaust pipe.
Adelaide Airport confirmed the incident involving a Saab 340 plane – a Swedish twin-engine aircraft – with a capacity for 34 passengers closed the runway for around 20 minutes.
At Whyalla airport on the east coast of the Eyre Peninsula, security screening costs were blamed for both an increase in ticket prices, a drop in passenger numbers and the permanent departure of Rex Airlines in 2023.
The estimated return to the airline’s creditors is being determined, no return to shareholders was expected and the company is no longer listed on the Australian Securities Exchange.
The federal government has reached an agreement with Air T around restructuring financing arrangements in connection with the acquisition.
-with AAP
