Administrators of the Australian regional carrier Rex Airlines have embarked on a mission to secure a buyer for the airline, which was forced into voluntary administration due to accumulating over $500 million in debts. The collapse of Rex was attributed to various challenges, including a scarcity of pilots, issues in the supply chain, and flights not operating at full capacity, particularly on the 737 city domestic trunk route services.
The regional business operated by Rex remains unaffected by the administration process and continues to provide flight services across rural and regional Australia. Despite the ongoing investigations by the administrators to ascertain the root causes of the airline's collapse, preliminary findings have highlighted challenges such as limited access to pilots, supply chain hindrances related to engine parts, and low load factors on certain flight routes. Administrator Sam Freeman mentioned that Rex's expansion into capital city routes in 2020, supported by private equity firm PAG with $150 million, was not immune to the operational struggles faced by the airline.
Before falling into administration, Rex Airlines had pointed fingers at pilot shortages, with claims of "pilot poaching" by competitors Qantas and Virgin being made in previous submissions to government reports. The administrators are currently investigating whether the airline operated while insolvent, and they plan to present their findings to the creditors during the upcoming second creditors meeting in early September. Plans for the sale of Rex are in progress, and administrators are hopeful of finding a suitable buyer, with various parties already showing interest and engaging in the process. Despite uncertainties surrounding potential government support or bailout, the continuation of regional flights with Rex remains uninterrupted, giving customers assurance of operational stability in the midst of the airline's financial turbulence.