Rex Airlines wants to sell off its premises, buildings and aircraft spare parts while the insolvency administrators work to keep the financially troubled airline in the air.
Consulting firm EY Australia was appointed to rescue the five Rex Group companies after the airline grounded its Boeing 737 fleet on key metropolitan routes.
Rex’s regional flights have been able to continue due to ongoing funding from private equity firm PAG Asia Capital as the airline desperately seeks a buyer or financial bailout.
EY partner Samuel Freeman said at an initial meeting of Rex creditors on Friday that the insolvency administrators had launched the asset sale program as part of the restructuring efforts.
Company premises and buildings, spare parts and even a flight simulator may be available, Freeman said.
EY has also begun contacting “a large number of potential interested parties” to find a buyer or investor for the airline.
“Some are already implementing disclosure agreements … there is quite a lot of interest, which is really positive,” Mr Freeman said.
According to EY, the airline, which has around $500 million in debt, is in daily discussions with the federal government about the situation.
Rex Airlines is looking to sell off its premises, buildings and aircraft spare parts while liquidators work to keep the airline afloat (pictured is a Rex Airlines aircraft in Sydney).
Union representatives have said they would support Rex as long as regional flights are given priority.
An initial investigation by EY found that competition in the domestic mainline market was a major cause of the financial problems, Freeman said.
The airline has struggled to compete with major carriers Qantas and Virgin Australia on key capital city routes since an aggressive push in 2021.
Other reasons, according to those responsible, were a lack of pilots, which led to “suboptimal fleet utilization,” as well as problems in the supply chain and maintenance.
The airline operates a fleet of ageing Saab 340 aircraft on regional routes.
At a second creditors’ meeting, which has yet to be scheduled, a vote will be taken on whether the Rex companies will be returned to the existing board of directors, whether they will be included in a partnership agreement or whether they will be liquidated.
Founded in 2002, Rex is Australia’s largest independent regional airline, operating approximately 1,050 flights per week on 45 routes.
