The Australian government shows that if the long-painted administration does not bring the right buyer, it can win the Fighting Operator Regional Express (REX).
On February 12th, Canberra said it will continue beyond June 30th in partnership with REX Administrator EY Australia to “ensure vital regional aviation services.” This is the deadline for the second sales process. A portion of Rex's business was successfully sold to private sector buyers, but the initial sales attempts failed.
The government has said it will work with finalists on “what support (IT) can be provided to maximize the prospects for successful sales.”
“However, if no sales are made, the government will consult with relevant state governments to take on the necessary work on emergency response options, including preparations needed to potentially acquire,” he said. .
However, the government has emphasized that it is not a sales process, and that it “want to see a successful market-driven outcome.”
If Canberra acquires Rex, which effectively nationalizes its carriers, it will be the first time in 30 years that the Australian government has invested in an airline. In 1995, the government privatized Qantas through public stock sales.
Canberra has also abandoned the “use or lose it” rule in slots at Sydney airport, ensuring Rex has access to these slots until October 24, 2026.
The announcement comes after the Australian government extended its $80 million ($50 million) loan to the airline to continue operating the route until June 30th. It also acquired $50 million in debt from Rex's biggest creditor, Pagac Regulus Holdings, at the beginning of the year.
Rex took office in July 2024 after financial challenges were raised after expansion into the jet business. Boeing Flight 737 was grounded in July, but the airline continued its SAAB 340 local flights after the government agreed to guarantee these services.
Justifying the need for government intervention, Australia's Minister of Transport Catherine King said: We recognize today that we are intervening to keep these routes in the air. ”
Meanwhile, Australian Prime Minister Anthony Albanese has repeatedly reiterated the government's preference for “the private sector will be successful” to buy Rex.
“To be very clear, we prefer that the private sector succeed in bidding. But what we do is to the local community the certainty that they will not remain abandoned. “It's to provide because it causes real problems in those areas,” says Albanese. South Wales.
