Rex goes into administration: what is the market impact?
Regional Express Holding, the parent company of Rex Airlines went into voluntary administration on 30 July 2024 following a tumultuous few months of boardroom battles. The picture looked bleak with media reports over the weekend of turnaround specialists being brought in, share trading suspended on Monday, suspension of sales on some routes by Tuesday morning, and entering into administration on Tuesday evening. This is the second airline entering administration this year after Bonza’s collapse in April. However, Rex’s collapse is far more consequential due to its history, size and relative importance to regional and rural Australia. So what are the implications?
Rex is larger and more diverse business than immediately apparent and it’s administration has vastly different implications depending on what parts of the business survive. There are several key parts:
Rex’s jet airline that operates 9x B737-800s on RPT (regular passenger transport) flights on trunk routes, often called “capital city routes”.
Rex’s regional airline that operates 57x Saab turboprops on RPT flights to and from regional cities and towns.
Pel-Air which operates approximately 20 small jet and turboprop aircraft on charter flights including several air ambulance services on behalf of state governments.
National Jet Express (formerly Cobham Aviation) that operates approximately 20 jet aircraft, offering wet leased cargo and FIFO (fly in fly out) charter services. This is 50% owned by Rex.
And various flight training and maintenance businesses.
So far, there has been a clear indication from all parties that the regional airline and other flying subsidiaries will continue operating under administration but that the B737-800 jet service will temporarily cease operating. It is increasingly likely that this will become permanent, whether through a winding down or sale of that business. So let’s consider the impact of this.