Major blow for failed airline Rex – and entire cities could be cut off from the rest of Australia

Embattled regional airline Rex is reportedly still waiting for a buyer two months after it entered voluntary administration with debts of $500million.

A source close to the business has revealed there is little interest in the airline, putting major regional cities at risk of being cut off from the rest of Australia.

‘Rex has always been a bit of a Frankenstein business that was put together so it was somewhat inevitable the business would be broken up,’ they told The Australian.

‘It has also understandably been a slow process but I think things are starting to move – finally.’ 

The source said they were a ‘little surprised’ there hadn’t been any offers and that concerns about its Saab 340 fleet are ‘somewhat overblown’.  

‘These Saabs have largely flown short distances over a long period of time so people like to talk about age in terms of years, but in terms of kilometres flown, it’s not that old a fleet,’ they told the publication. 

‘I think people might be waiting to see if the government might provide some sort of guarantees or support for the business to allow them to step in.’

Consulting giant EY was appointed as voluntary administrator to Rex on July 30.

EY is still on the hunt for a buyer to get regional airline Rex back in the air

EY is still on the hunt for a buyer to get regional airline Rex back in the air

Since then it has sought an extension of the administration until November 25 in a bid to get a better outcome for more than 4,800 creditors. 

But while there have been no interested buyers, the source said a number of assets had been sold to provide some much-needed cash proceeds.

They include the sale of a Boeing 737 flight simulator, spare parts and non-essential real estate, including a small house near Sydney Airport purchased by former chairman Lim Kim Hai who was ousted by board members in June. 

Regional Express, as it was known when it started operations in 2022, included a fleet of 57 Saab 340s and a flight network encompassing 45 destinations. 

The administration is not expected to be extended beyond the current deadline of November 25, with the source suggesting deals will be finalised in coming weeks.

The latest Rex revelation comes in the same week as former feuding bosses, Mr Lim and John Sharp, opened up on the airline’s collapse.

The latest Rex revelation comes in the same week as former feuding bosses, Kim Hai Lim (pictured) and John Sharp, opened up on the airline's collapse

The latest Rex revelation comes in the same week as former feuding bosses, Kim Hai Lim (pictured) and John Sharp, opened up on the airline’s collapse

The blame game continued as the former airline bosses reflected on what went wrong for the regional carrier in a episode of the ABC’s Four Corners program. 

Mr Lim and Mr Sharp – a former Howard government transport minister – built the airline and ran it for almost 20 years.

However, they are no longer on speaking terms.

‘I didn’t know anything about airlines. If I did, I wouldn’t have gotten involved,’ Mr Lim said.

Mr Sharp said he felt it was the ‘right moment’ to launch Rex two decades ago.

‘Now clearly, as history shows, that didn’t work to the way we wanted it to,’ he said.

Rex’s first Melbourne to Sydney flight begin in 2021. However, by the second half of 2023, it was losing almost $1million a week.

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