US NASDAQ-listed giant Air T has emerged as the buyer of REX, Australia’s regional airline which tried unsuccessfully to take on Qantas and Virgin Australia with jets in 2022. But will the US company be able to breathe life into the embattled airline.
Rex entered voluntary administration in July 2024, with mounting debts and was forced to ground its 10-strong Boeing 737-800s. REX emerged from the collapse of Ansett in 2002 and is the combination of two airlines – Kendell and Hazelton.
Twenty-four of the airline’s 56 SAAB 340s turbo-props were also grounded
Air T’s core business lies in aircraft leasing, parts, engine maintenance and regional aviation infrastructure and it sees opportunity in Rex’s assets — routes, workforce, infrastructure, turboprop fleet — all primed for revitalisation.
Air T has stated that it wants to maintain Rex’s regional core, invest in engine-and-fleet renewal, and underpin the turboprop-centric network that delivers connectivity to remote Australian communities.
However, the ageing Saab 340 fleet, at 32.2 years old, is a major problem with aircraft grounded pending parts or engines and the fleet needs to be replaced.
Balancing that staff will be thrilled with the new owners who understand and live and breathe aviation.
It is however, highly unlikely that the new owners would try and take on Qantas and Virgin Australia but would more likely would work with the latter to build a strong link between regional and mainline route across Australia with code-shares and other levels of cooperation.
Creditors are owed about $500 million and will take a major hit while shareholders will get no return.
There is a lot to be done.
Air T must coordinate with government stakeholders keen to keep regional air links alive, and integrate Rex’s operational matrix with its own global platform.
From an engineering standpoint, the shift is significant with maintenance to be upgraded, parts procurement streamlined, the turboprop fleet stabilised and modernised.
For regional Australia – 45 destinations – the implications are far reaching with stability of air services promised.
The T REX combo promises service continuity on routes that might otherwise have been lost.
Strategically, Air T’s arrival may also enable more predictable scheduling, improved dispatch reliability and a longer-term transition to newer aircraft types such as the ATR 42.
The REX network.
