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15 August, 2024

Government guarantees regional flights for REX customers during administration process

A Rex Airlines Boeing B737-85R plane, registration VH-MFM, landing at Sydney Kingsford-Smith Airport as flight ZL549 from the Gold Coast. In the foreground is the airport's security fence with a warning sign not to enter. This image was taken from near Kyeemagh Beach, Botany Bay on a cold and sunny afternoon on 27 June 2024.

By Zach Havard

The Albanese Government has today announced it will guarantee regional flight bookings for Rex customers throughout the voluntary administration process.

Regional travellers can continue to book flights on REX during the process with the certainty that they will either fly or get their money back.

“Rex’s continuation is in the best interests of Australia – and the Government is working closely with the administrators to ensure a strong regional aviation presence now and into the future,” a statement from Transport Minister Catherine King said.

“The guarantee is for all regional flight bookings with Rex made after it entered voluntary administration at 9:31pm on 30 July 2024.

Sam Freeman, the Voluntary Administrator of Rex Group welcomed the decision.

“This will give customers confidence to continue booking regional flights with Rex – flights that allow them stay connected to family, friends, healthcare and other services – while also helping to maintain regional aviation in Australia.”

“Rex welcomes the announcement today of the Federal Government’s Regional Flight Booking Guarantee, which is a positive step toward securing the future for Rex, Rex’s 1,200-plus employees and all Australians who rely on these services to connect their communities.

“We have experienced first-hand the importance of Rex’s regional services to the communities the airline serves and would like to express our gratitude to the Federal Government for stepping in with this support.

“The Federal Government’s flight booking guarantee will give Australians confidence to continue booking to or from a regional destination on Rex, ensuring that in the unlikely event that their service is not delivered – they will be entitled to receive a full refund.

“The guarantee will help Rex to keep flying while we undertake the recapitalisation of the airline and secure its future. We’re currently undertaking a process to find an investor committed to a sustainable commercial regional network.

“On behalf of the entire Rex community – from the dedicated crew to the community Rex serves – I would like to thank the Minister for Infrastructure, Transport, Regional Development and Local Government, and the Commonwealth Government, for their support.

“Rex is here for regional Australia, and we encourage all Australians to see Minister King’s announcement today as a confidence boost and continue booking during the voluntary administration.”

Meanwhile in Europe, budget airlines are offering subscription services for one year ‘all you can fly’ memberships to bolster their customer base.

Wizz Air unveils €499 ‘all you can fly’ annual subscription

What the guarantee actually means

In the event that a Regional Express Holdings Limited (Administrators Appointed) flight is subsequently cancelled and not rescheduled, and no alternative service has been delivered to the customer, and the Rex Companies are unable to provide a refund, the Federal Government has agreed to provide a guarantee over any chargebacks and refunds.

The Regional Flight Booking Guarantee covers any chargebacks and refunds which become owed by Regional Express Holdings Limited (Administrators Appointed) for Customers who have booked a ticket for a flight after 9:31pm (Australian Eastern Standard Time) on 30 July 2024.

ATIA welcomes Government guarantee, calls for wider industry support

The Australian Travel Industry Association (ATIA) has welcomed the news, stating the decision the first crucial step, though says assistance must extend to the wider travel ecosystem, which is significantly impacted by Rex’s situation.

Currently, travel businesses are carrying an exposure of $11.5 million due to Rex’s administration.

These advisors and agencies have been at the forefront, working tirelessly to assist affected customers and deal with traveller uncertainty while absorbing the financial strain caused by the airline’s operational challenges.

“While the guarantee for Rex bookings is a vital measure, it is equally important to recognise the burden being shouldered by travel advisors across Australia,” ATIA CEO Dean Long said.

“These professionals have not only faced substantial financial exposure but have also taken on an increased workload, ensuring that travelling Australians receive the support they need during this difficult time.

“We call on the Federal Government to provide financial assistance to travel advisors and businesses who are also caught up in the Rex situation and who play such a vital role in supporting Australian travellers, corporate and leisure.

“Extending this support is not just about fairness; it’s about maintaining the resilience and integrity of Australia’s travel sector. We look forward to further discussions with the Government to secure this necessary support.”

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