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Representatives from US firm Air T have met with the Australian government to “look at the next phase” for Rex, the Transport Minister has said.
Speaking to reporters at Parliament House, Transport Minister Catherine King said the firm, which took ownership of Rex in a $172.5 million deal last December, had “given significant undertakings to the government around regional connectivity”.
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As part of the deal, the government has offered financial support for Rex’s operations in exchange for guarantees by Air T to return more of its aircraft to service and maintain its regional passenger flights; the government will also retain its security over the Rex fleet to prevent it from being sold.
“They are absolutely determined in our discussions that we had with them yesterday, to … get back to classic Rex and the business of actually servicing regional Australia,” the Minister said.
“We hope and we think this is a business that can make money. We think it is a business that can grow.
“We hope, in welcoming this company into Australia, into the passenger and regional passenger market that we will see growth in regional aviation over time, but they’ve got work to do to really consolidate and make sure that the businesses is making money and is on a strong footing.”
The minister also said there was “no time frame” as yet for when Air T would be expected to repay the government for its support.
“Obviously, we took on $108 million of debt and also have assisted with $60 million; they will need to repay that,” she said.
“We obviously have expectations … that that will be repaid as Rex returns to profitability, but we are really determined to support Rex for the long haul and to make sure it can continue in those regions. But there are undertakings Air T has done in that process as well.”
On its website, Air T, the business arms of which include aircraft trading, aircraft leasing, parts, and freight operations, bills itself as “an industrious American company with a networked portfolio of powerful businesses, each who operate independently yet interrelatedly”.
According to Minister King, the government is confident that the firm will be able to address the “unique economic challenges” of regional aviation in Australia.
“This is an operator who’s been operating in the US for a long period of time. Over 40 years, they’ve been operating FedEx services, freight services. They’re very familiar with the Saab aircraft. This is their first foray not just into Australia but into passenger,” she said.
“They’re not someone who’s coming in to make a quick profit and then get out. They’re a long-term aviation business that loves aviation and loves regional aviation, and we are looking forward to working with them to make sure that regional aviation keeps strong in this country.”
Air T has said it will invest $50 million into recapitalising the business, including increasing the number of Saabs in service from around 31 to 44 by mid-2027, and will not seek to take on Qantas and Virgin Australia again.
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says:Yes I am happy that, for now, REX is operating out of administration and serving our patient rural residents but to me the figures don’t stack up. In allowing Air T to fly, our Govt. has taken on a total of AU$168M (their figures) as credit or, debt to /for the operation to fly. In addition, Air T says it will invest another AU$50M into recapitalising the business on top of the AU$172.5M purchase cost. One needs to know the true asset value of this total operation especially when you consider the age of their fleet as on the surface this business aint going anywhere but down; – with our money.