Media release – Anthony Albanese MP, Prime Minister of Australia; Senator Katy Gallagher, Minister for Finance, Minister for Women, Minister for the Public Service, Minister for Government Services; Catherine King MP, Minister for Infrastructure, Transport, Regional Development and Local Government, 12 February 2025
Albanese Government supporting and securing regional aviation
The Albanese Labor Government is building Australia’s Future, today announcing regional Australia will continue to receive critical aviation services into the future.
The Albanese Government will work with the Administrators of Regional Express Holdings (Rex), as part of an upcoming competitive sale process, to ensure crucial regional aviation services continue beyond 30 June 2025.
We will work with shortlisted bidders on what support the Albanese Government may be able to provide to maximise the prospect of a successful sale.
Terms of Commonwealth support will be subject to negotiation, but will be conditional on commitments by bidders to provide an ongoing, reasonable level of service to regional and remote communities, the need to provide value for money to taxpayers and good governance.
The Government is not a bidder in the upcoming sale process and would like to see a successful market-led outcome. However, in the event there is no sale, the Albanese Government will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations necessary for potential Commonwealth acquisition.
The Albanese Government is also providing further support through a waiver of the “use it or lose it” test for Rex regional flight slots at Sydney Airport, which will ensure its access to those slots until 24 October 2026.
This comes on top of the Albanese Government providing a loan of up to $80 million to keep Rex’s vital regional routes operating until 30 June 2025, and acquiring $50 million of debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited, earlier this year to ensure the airline could continue to operate.
These actions make clear the Government’s ongoing commitment to maintaining access to aviation services for regional and remote communities, and recognises the critical role of the Rex network to local economies.
The Albanese Labor Government will back regional aviation just like we back regional telecommunications because we know our great country towns deserve quality services and connectivity just like our cities.
Comments attributable to Prime Minister Anthony Albanese:
“Regional Australians deserve access to quality and crucial regional aviation services.
“We are working collaboratively with the administrators of Rex to ensure that regional services continue beyond June 2025, including looking at what support the Commonwealth can provide.
“Regional Australians can be assured that our Government will continue to fight to ensure these regional airfares remain available.”
Comments attributable to Minister for Finance Katy Gallagher:
“The Albanese Government believes regional and remote communities deserve reliable, affordable and accessible air travel.
“That’s why we’re taking steps to ensure the best possible deal for the sale of Rex.
“Aviation services are essential for our regions, and our government is committed to seeing these services continue into the future.”
Comments attributable to Minister for Transport Catherine King:
“Regional Australians rely on these important services and the Albanese Government making sure communities outside capital cities aren’t shortchanged.
“When markets fail or struggle to deliver for regional communities the Government has a role to ensure people do not miss out on opportunities, education and critical connections.
“We are recognising that today and stepping in to keep these routes in the air.”
Media release – Australian Travel Industry Association (ATIA), 12 February 2025
Rex survival is critical
The Australian Travel Industry Association (ATIA) supports the idea that the Federal Government should be the buyer-of-last-resort for Regional Express Holdings (Rex), given the first option should always be for a private buyer.
With around $11.5 million in outstanding payments owed to travel agents, predominantly in regional and rural Australia, ATIA is also asking the Government to ensure that any public funds used to support Rex’s ongoing operation use a clawback mechanism for these outstanding debts over a 12-month period.
The Government today confirmed additional support will be provided to help maximise the prospect of a successful sale, including a waiver of the “use it or lose it” test for Rex regional flight slots at Sydney Airport, which will ensure access until 24 October 2026. The Government has also announced that in the event there is no sale, the Government “will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations necessary for potential Commonwealth acquisition.”
Today’s announcement is in addition to the Government lending up to $80 million to keep Rex’s regional routes operational until 30 June 2025 and acquiring $50 million of debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited, earlier this year to ensure the airline could continue to operate.
ATIA continues to work closely with the Government to ensure the needs of the Travel Sector are considered throughout the process.
QUOTES ATTRIBUTABLE TO ATIA CEO DEAN LONG:
“There’s no doubt that the ideal solution will always be a private buyer. If the Government does buy Rex, they must make good on the money owed to Australian travel agents and airports as a result of Rex’s collapse.”
“Around $11.5 million is currently owed to Australian travel agents who are predominantly small-business owners in regional and rural Australia. Like these agents, there are also a number of airports that have significant losses due to the collapse of Rex. Any buyout of that debt or nationalisation of the airline must see these debts repaid as a priority. This can’t just be about sending money to international creditors.”
“Government gave over $5 billion to airlines during COVID, yet despite that, we’ve ended up with higher airfares. Australia has the most concentrated aviation market in the world. We also have to acknowledge that a number of the routes Rex operates are actually mandated monopolies, so we need a robust third airline business in Australia. ATIA has asked, including in our pre-budget submission, that the Australian Competition and Consumer Commission be empowered and funded to undertake an annual market concentration study of international and domestic services and funded to continue its Domestic Airline Competition Monitoring reports beyond 2026.”
“The major issue for Rex is the age of the fleet, and this will be a major barrier for any buyer as there is a global shortage of aircraft. If we allow Rex to collapse, it’s going to lead to even higher prices for regional communities but, critically, also a huge loss of connectivity, which will have a significant impact on their economies.”
