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The government also announced a separate plan to establish a program for local government and regional and remote airports – capped at $5 million – that supported Rex through the voluntary administration process.
Australian Airports Association CEO Simon Westaway called the support “wonderful news for our regional and remote airports” and thanked the federal government for the “vital support to regional and remote airports that stood by Rex during challenging times”.
Earlier on Tuesday, administrators EY, working for the government, confirmed that creditors of Rex will receive nothing. The deed of company arrangement provides no return to ordinary unsecured creditors for the Rex, the document stated, referring to suppliers, ground handling agents, airports, and fuel providers for the airline.
In its report, EY said the factors that contributed to Rex’s failure included the global pilot shortage, which led to “suboptimal fleet utilisation” with not enough planes flying in the air.
Ongoing “supply chain issues, particularly engine maintenance components” were also a contributing factor.
Rex’s decision to invest in 737s to fly capital city routes came as it struggled to keep its Saab regional planes flying core regional routes, which further constrained cash flow. Rex’s fleet size simply wasn’t big enough to service the cities and the bush.
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