Budget airline Rex has plunged into administration, with flights between capital cities grounded.
The airline suspended trading on the ASX on Monday and on Tuesday night it was confirmed that EY had been appointed as administrators.
Rex will cancel flights between major cities and instead focus on regional flights.
A source told the Australian Financial Review that the federal government had stepped in to ensure that regional flights were not axed, however the airline will stop competing with other airlines on established routes between larger cities.
Virgin Australia immediately stepped in to support Rex customers by offering them free transfers onto equivalent flights.
The airline also encouraged Rex staff to apply for jobs with the airline.
Virgin Australia has also swooped in on Rex’s Boeing 737-800s, with the airline planning to secure leases for three of the aircraft that Rex will no longer use.
‘Virgin Australia has made an offer for Rex customers with an existing ticket on a flight cancelled due to the administration process the opportunity to transfer their ticket free of charge to the 13 overlapping Virgin Australia services,’ EY said.
Budget airline Rex has plunged into administration, with flights between capital cities grounded
The airline suspended trading on the ASX on Monday and on Tuesday night it was confirmed that EY had been appointed as administrators
‘Rex and Virgin Australia are also exploring opportunities to support regional customers, which include Virgin Australia selling Rex’s regional services through codeshare or interline arrangements, and making Velocity Frequent Flyer benefits available to Rex’s regional customers.’
Rex is the second major domestic airline to collapse in Australia this year following the demise of Bonza.
Rex is even more vital, flying to some 56 destinations across the country, and is a lifeline for some small regional communities.
Prime Minister Anthony Albanese said earlier on Tuesday that the federal government was ‘concerned’ about Rex and would evaluate its options.
But he also noted the airline already received ‘substantial government support with no conditions attached’.
Transport Minister Catherine King said the government was in touch with the airline and keeping an ‘hour-by-hour’ watch on the situation.
Where Rex flies: The regional carrier is a vital lifeline to regional communities – flying 56 routes
‘Regional Australians rely on Rex,’ she told Channel Seven‘s Sunrise on Tuesday.
‘It’s an incredibly important airline. In many cases (it’s) the only airline going into a range of smaller country towns and people are heavily reliant on it.
‘We are treating this very seriously and being very vigilant about what is happening, and keeping an eye on the situation hour by hour.’
Rex has built a strong reputation since its inception in 2002 and became known for its reliability.
The Bureau of Infrastructure and Transport Research Economics found in April the airline cancelled just one per cent of its flights – beating all of its competitors.
The domestic airline was recognised internationally at the World Airlines Awards in early July when it received the title for Best Regional Airline in Australia/Pacific.
