ATIA: Federal government should be buyer-of-last-resort for Rex Airlines
Association leaders pointed out that private buyers ought to have first shot at the purchase
The Australian Travel Industry Association (ATIA) supports the idea that the Federal Government should be the buyer-of-last-resort for Regional Express Holdings (Rex), given the first option should always be for a private buyer.
According to ATIA chief executive Dean Long: “There’s no doubt that the ideal solution will always be a private buyer. If the Government does buy Rex, they must make good on the money owed to Australian travel agents and airports as a result of Rex’s collapse.”
With around $11.5 million in outstanding payments owed to travel agents, predominantly in regional and rural Australia, ATIA is also asking the Government to ensure that any public funds used to support Rex’s ongoing operation use a clawback mechanism for these outstanding debts over a 12-month period.
However, Long was also quick to point out: “The major issue for Rex is the age of the fleet, and this will be a major barrier for any buyer as there is a global shortage of aircraft. If we allow Rex to collapse, it’s going to lead to even higher prices for regional communities but, critically, also a huge loss of connectivity, which will have a significant impact on their economies.”
Support provided as necessary
As of today, 12th February, the Federal Government confirmed that additional support will be provided to help maximise the prospect of a successful sale, including a waiver of the “use it or lose it” test for Rex regional flight slots at Sydney Airport, which will ensure access until 24 October 2026.
The Government also announced that, in the event there is no sale, the Government will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations necessary for potential Commonwealth acquisition.
Today’s announcement comes as an addendum to the Government lending up to $80 million to keep Rex’s regional routes operational until 30 June 2025 and acquiring $50 million of debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited, earlier this year to ensure the airline could continue to operate.
ATIA continues to work closely with the Government to ensure the needs of the Travel Sector are considered throughout the process.
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