Rex Airlines Could Become Government-Owned If No Private Buyer Steps Forward

The Australian government is considering buying the country's largest independent regional airline, Rex, if no private buyer comes forward.

Prime Minister Anthony Albanese said on Tuesday that the government was willing to support shortlisted buyers. He added that any potential buyer must promise to maintain a fair level of service for regional and remote communities, while ensuring good management and value for taxpayers, Investing reported.

Although the government prefers that a private company take over Rex, it has not ruled out the possibility of buying the airline itself, if necessary.

"We are working collaboratively with the administrators of Rex to ensure that regional services continue beyond June 2025, including looking at what support the Commonwealth can provide," the prime minister said, News AU reported.

"Regional Australians can be assured that our government will continue to fight to ensure these regional airfares remain available. Regional Australians rely on these important services and the Albanese government making sure communities outside capital cities aren't short-changed."

Albanese emphasized that it was the government's responsibility to step in when markets failed or struggled to meet the needs of regional communities, adding that the goal was to ensure that people in these areas do not lose access to important opportunities, education, and essential connections.

Finance minister, Transport Workers Union support efforts

Finance Minister Katy Gallagher said that people in regional and remote Australia should have access to dependable, affordable, and convenient air travel. She assured that the government was working to secure the best possible deal for Rex's sale.

The government recognizes the importance of aviation services for regional areas and is committed to ensuring they continue in the future, Gallagher stressed.

The Transport Workers Union said this was an important step for the future of aviation, focusing on workers and passengers rather than highly paid executives. The union also pointed out that this move offers hope for the aviation industry after years of prioritizing short-term profits, which have pushed it into crisis.

Legal troubles surrounding Rex

After Rex went into financial trouble last year, the government had provided a loan of up to AU$80 million to keep the airline's regional flights operational until June 30. The government has also taken on AU$50 million of Rex's debt from its main creditor.

The airline is under investigation by the corporate regulator for allegedly misleading investors about its financial condition. The claims date back to Feb. 28, 2023, more than a year before the airline went into voluntary administration on July 30, 2024, with around AU$500 million in debt.

In December, the Australian Securities & Investments Commission accused former executive chair Lim Kim Hai and directors John Sharpe, Lincoln Pan, and Siddharth Khotkar of failing to meet their responsibilities.

The regulator claimed they issued a misleading ASX announcement on Feb. 28, which presented an overly positive outlook on the airline's profits.