Future of Rex up in the air

Rex remains in limbo over its future ownership as the airline continues to fly to and from King Island.

Reports in the Australian Financial Review and aviation media suggest U.S.-based aviation investor Air T may have lodged an offer and is in negotiation.

But Rex, its administrators at Ernst & Young, and Air T have made no official announcement.

Rex has been in voluntary administration since July 2024, burdened by debt from its failed capital-city jet expansion.

The Federal Government has provided an $80 million loan and purchased $50 million of Rex debt from its major creditor, making it the largest secured creditor and giving it significant influence over the outcome.

Ministers have signalled they could step in directly if no buyer emerges, but still prefer a market-based solution.

Air T, listed on the NASDAQ, is not a passenger airline operator. Its businesses centre on cargo flying, aircraft parts and engine trading, and ground-support equipment, with an Australian presence through Worthington Aviation at Brisbane Airport, which supplies Saab aircraft parts and maintenance services.

This is directly relevant to Rex, whose regional fleet is built around ageing Saab 340 turboprops.

Any sale of Rex remains conditional.

Under voluntary administration laws, creditors, not shareholders, will decide the company’s future at a formal meeting.

Shareholders have little say in the process, and Rex’s shares have been suspended from trading on the ASX since July 2024.

Administrators have already extended the sale deadline once and sought a further extension to December, reflecting the complexity of the process.

For King Island, where Rex provides vital air links to Melbourne and Tasmania, the outcome is critical. Communities across regional Australia rely on the airline’s network, and any buyer will also need to satisfy government conditions to maintain regional routes and connectivity.

While Air T is reported to have shown formal interest, no terms or conditions of its bid have been disclosed.