Rex Airlines Employees Laid Off After Company Enters Administration
Hundreds of Rex Airlines employees have been officially let go after the regional carrier entered voluntary administration on Tuesday, July 26th. The airline grounded its services and appointed administrators from Ernst & Young (EY) to oversee the business.
At an all-staff meeting on Wednesday, employees were informed that 610 jobs were at risk, with 360 from its capital city operations and 250 from its regional and rural carrier, Regional Express. Administrators informed staff that the business was not viable and it could be weeks or months before they receive their wages or redundancy packages.
A consultation process with staff began on Wednesday, and employees began receiving termination notices that night. By Thursday, 360 employees from the capital city operations had received official notices. Administrators are expected to provide an update on the financial position of the business and next steps at a creditors' meeting on August 9th.
The termination letter obtained by the ABC stated that the company's 737 operations would cease and that employees' positions had been made redundant. The letter also confirmed that employees would not be paid their entitlements immediately due to the company's financial position.
Along with the termination letter, employees were provided a detailed creditors notice outlining EY's involvement with the company in recent months. The document included a list of meetings between EY and members of Rex's board, indicating that EY was requested to conduct an independent review of the airline on May 9th. The review was presented on May 20th, and follow-up meetings were held throughout June.
On July 19th, a "contingency planning" meeting was held with representatives from EY, Rex's directors, and management. The following Monday, EY met with Deloitte and representatives from PAG, a private equity group that invested $150 million into Rex in 2021.
On July 25th and 26th, further meetings were held with PAG representatives and Rex's board to discuss voluntary administration funding arrangements and a communications strategy. Finally, on Tuesday, July 26th, Rex's board was presented with a final report on the company's financial position, leading to the company entering voluntary administration at 9:30pm.