Australian Government Intervenes to Support Rex Airlines Amid Financial Turmoil
Government assumes $50 million debt to aid regional airline's recovery and maintain essential services.
The Australian federal government has assumed a $50 million debt to support regional carrier Rex Airlines, helping to prevent its potential liquidation.
The debt, previously held by the largest creditor PAGAC Regulus Holdings Limited, was acquired to protect crucial aviation services for regional and remote communities.
Rex Airlines has been under voluntary administration since June 30 of last year, with Ernst and Young (EY) appointed as administrators.
The government, in a statement from Transport Minister Catherine King and Finance Minister Katy Gallagher, expressed commitment to preserving essential regional air transport amidst Rex's financial difficulties.
EY, tasked with securing the airline's future, was granted an extension for the voluntary administration period until June 30 following a Federal Court order.
This extension is supported by an $80 million commercial loan from the government, intended to facilitate business improvements and expansion, including fleet growth.
As part of the recovery strategy, Rex sold its air ambulance unit, Pel-Air, to logistics company Toll for $47 million.
Additional asset sales are underway.
The government also addressed passenger concerns by guaranteeing ticket sales until June 30, covering potential refunds for canceled flights.
Further assistance measures include early access to the Fair Entitlements Guarantee for former employees, with over $7.1 million distributed to date.
These efforts underline the federal government's commitment to sustaining essential services and supporting regional economies through the challenging period for Rex Airlines.
The debt, previously held by the largest creditor PAGAC Regulus Holdings Limited, was acquired to protect crucial aviation services for regional and remote communities.
Rex Airlines has been under voluntary administration since June 30 of last year, with Ernst and Young (EY) appointed as administrators.
The government, in a statement from Transport Minister Catherine King and Finance Minister Katy Gallagher, expressed commitment to preserving essential regional air transport amidst Rex's financial difficulties.
EY, tasked with securing the airline's future, was granted an extension for the voluntary administration period until June 30 following a Federal Court order.
This extension is supported by an $80 million commercial loan from the government, intended to facilitate business improvements and expansion, including fleet growth.
As part of the recovery strategy, Rex sold its air ambulance unit, Pel-Air, to logistics company Toll for $47 million.
Additional asset sales are underway.
The government also addressed passenger concerns by guaranteeing ticket sales until June 30, covering potential refunds for canceled flights.
Further assistance measures include early access to the Fair Entitlements Guarantee for former employees, with over $7.1 million distributed to date.
These efforts underline the federal government's commitment to sustaining essential services and supporting regional economies through the challenging period for Rex Airlines.
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