<?xml version="1.0" encoding="ISO-8859-1"?> <docID>325971</docID> <postdate>2024-08-10 09:21:55</postdate> <headline>Asset sale launched to try to save Rex</headline> <body><p><img class="size-full wp-image-228447" src="https://citynews.com.au/wp-content/uploads/2021/04/75743_rex-australia_78163-e1723245452151.jpg" alt="" width="805" height="536" /></p> <caption>Regional Rex flights have continued as the airline desperately seeks a buyer or financial lifeline.</caption> <p><span class="kicker-line">By <strong>Sam McKeith</strong> in Sydney</span></p> <p><strong>Embattled regional airline Rex is looking to offload company land, buildings and aircraft spare parts as administrators work to keep the financially distressed carrier up in the air.</strong></p> <p>Professional services firm EY Australia has been called to salvage the five companies in the Rex Group since the airline grounded its Boeing 737 fleet on major metropolitan routes.</p> <p>Rex's regional flights have continued because of ongoing funding from private equity firm PAG Asia Capital as the airline desperately seeks a buyer or financial lifeline.</p> <p>EY partner Samuel Freeman told a first meeting of Rex creditors on Friday that administrators launched the asset-sale program as part of turnaround efforts.</p> <p>Company land and buildings, spare parts and even a flight simulator were all potentially up for grabs, Mr Freeman said.</p> <p>EY had also started contacting "a large number of likely interested parties" to find a buyer or investor for the airline.</p> <p>"Some are already executing on disclosure agreements ... there's been quite some interest, which is really positive," Mr Freeman said.</p> <p>EY says the airline, which is about $500 million in debt, is in daily discussions with the federal government about the situation.</p> <p>Labor figures have said they will back Rex as long as it prioritises regional flights.</p> <p>An initial EY probe revealed competition in the domestic "trunk route" market was a key contributor to the financial woes, Mr Freeman said.</p> <p>The airline had struggled since an aggressive move in 2021 to compete on key capital-city routes against majors Qantas and Virgin Australia.</p> <p>Other contributors were a shortage of pilots that created "sub-optimal fleet utilisation", supply chain issues and maintenance problems, according to the administrators.</p> <p>The airline operates a fleet of ageing Saab 340 aircraft on regional routes.</p> <p>A second creditors' meeting, yet to be scheduled, will include a vote on whether to return the Rex companies to the existing board, place them under a deed of company arrangement or liquidate.</p> <p>Formed in 2002, Rex is Australia's largest independent regional airline and makes about 1050 flights a week on 45 routes.</p> </body>