Rex Creditors Expected to Lose Entire Claims Despite Air T Sale
Creditors of Regional Express are unlikely to recover their outstanding claims, even as the airline prepares to be sold to US-based aviation holding company Air T. Administrators from EY, overseeing Rex since it entered voluntary administration in July 2024, warned that the sale will prioritize preserving essential regional air services rather than repaying the more than AUD500 million in debts owed. The transaction is expected to close by the end of 2025.
EY stated that proceeds from the sale will mainly be allocated to secured lenders and continuity of operations, leaving little to no return for unsecured creditors or shareholders. More than 4,800 creditors are affected, including numerous regional councils and airport authorities owed for airport service fees. Among them are the City of Albany, which is owed around AUD456,000, and the Shire of Esperance, owed approximately AUD440,587.
The Australian government is Rex’s largest individual creditor, having provided financial support during the administration period, including an AUD80 million loan and the purchase of AUD50 million in debt. Transport minister Catherine King confirmed that an agreement with Air T will restructure Rex’s financing arrangements but did not disclose further details. She emphasized that Air T will be required to operate under Australian regulatory frameworks and labor rules.
Under the acquisition, Air T will take control of Rex’s fleet of 57 Saab 340B turboprops and its pilot training center in Ballarat. The company said it intends to retain Rex’s workforce and gradually return aircraft to full service. Rex collapsed after expanding into domestic trunk routes and taking on significant lease-related debt tied to Boeing 737-800 operations.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com