Rex Airlines has announced that the company has entered voluntary bankruptcy and has cancelled all flights between major airports.
In a statement posted on Rex’s website on Tuesday evening, it said Regional Express Holdings Limited and a number of subsidiaries under the Rex Group have been placed into voluntary administration.
Ernst & Young Australia has been appointed as administrator.
The statement said regional Saab 340 flights were not affected and will continue, but domestic 737 services have been suspended and Virgin Australia is offering affected Rex passengers a free rebooking.
“Flights between major airports have been cancelled and all domestic Boeing 737 aircraft of the Rex Group are grounded,” the statement said.
‘Affected customers will be contacted directly by Rex.’
The statement said Rex and Virgin Australia are exploring options to support regional customers. This includes Virgin selling Rex’s regional services via codeshare or interline arrangements and making frequent flyer benefits available to Rex’s regional customers.
Virgin Australia CEO Jayne Hrdlicka said it was “a difficult time for Australian aviation”.
Rex Airlines has gone into voluntary bankruptcy and suspended all flights between major airports
“Our team is now moving quickly to support Rex’s customers and employees,” she said in a statement following Rex’s announcement.
‘Affected Rex customers will be supported free of charge to rebook onto an equivalent Virgin Australia service.’
Virgin also offered to support affected Rex employees who could apply for open positions via the airline’s website, she added.
Ms Hrdlicka said Virgin plans to work with Rex’s regional arm to provide “seamless access” to Virgin Australia’s domestic and international destinations in the future through potential codeshare or interline arrangements.
“The Virgin Australia team is thinking of everyone at Rex today, an airline with a proud and important role in Australian aviation, particularly in regional Australia,” she said.
Rex employs approximately 2,000 people.
Since 2021, the company has also operated between Sydney and Melbourne, one of the busiest routes in the world.
Trading in shares of Regional Express was halted on the Australian stock exchange amid recent boardroom turmoil and multimillion-dollar losses.
An announcement was expected to be made at the opening of trading on Wednesday.
The trading halt followed reports that Rex had hired consultancy firm Deloitte to audit the airline’s books.
Earlier on Tuesday, the prime minister had expressed doubts about the airline’s expansion into major urban routes.
He said he would consider proposals to save Rex, but the airline received significant government funding “without any strings attached”.
“One of the things I raised concerns about was that there were no conditions, which is why Rex moved away from its traditional role as a regional airline and now operates flights from Sydney to Melbourne, for example,” Albanese told reporters.
Nationals Senator Bridget McKenzie said the launch of flights by Rex, including a recent route from Melbourne to Perth, had led to competition with major airlines, often resulting in cheaper fares.
Virgin Australia has offered free rebooking to passengers scheduled to fly domestically on the Rex 737
“Let’s stop pretending that Qantas’ behaviour is acceptable in the aviation industry,” Senator McKenzie said.
“Every time they are challenged they try to outdo airlines like Rex … who want to offer Australians a different way to travel.”
Unlike Bonza, which went bankrupt in April, Rex is primarily the owner of the aircraft rather than a leaser.
The main fleet consists of 61 SAAB 340s and seven leased Boeing 737-800s, out of 123 aircraft.
Many regional communities rely on the airline, which was formed 22 years ago after the demise of Ansett.
Mayor Jason Hamling of Orange, a central-western hub in New South Wales, said he was grateful his community has multiple airlines, including Qantaslink and Link Airways.
Since COVID-19, Rex has struggled with profitability. In February, the company reported a net loss of $3.2 million for the first half of its 2023/24 financial year.
Rex shares last traded at 56.5 cents on Friday, down from 79 cents a month ago.