<?xml version="1.0" encoding="ISO-8859-1"?> <docID>338198</docID> <postdate>2025-02-13 08:18:04</postdate> <headline>Taxpayers take risk on Rex if ailing airline can’t sell</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>The government has already loaned Rex up to $80 million to keep regional routes running.</caption> <p><span class="kicker-line">By <strong>Alex Mitchell</strong> and <strong>Adrian Black</strong></span></p> <p><strong>A lack of buyer interest in embattled regional carrier Rex suggests a major flaw with the business that could leave taxpayers facing a hefty bill if the airline is nationalised, experts say.</strong></p> <p>After an unsuccessful sale process in late-2024, a potential government takeover is on the table if the ailing airline's administrators can't find a buyer on the second try.</p> <p>The government has already bought $50 million of debt from Rex's largest creditor and loaned it up to $80 million to keep regional routes running, but no serious suitor has emerged.</p> <p>"This suggests something fundamentally wrong with Rex's business model and that there are further costs and risks involved - like having to renew Rex's very old fleet of Saab 340 in the not-so-distant future - that no investor is prepared to take," Sydney University transport professor Rico Merkert told AAP.</p> <p>"The question then is why the taxpayer should take that risk, whether this will distort competition with (other) airlines and what the taxpayer will get in return."</p> <p>Prof Merkert acknowledged one of those returns was lower airfares and better connectivity through regional routes, but he questioned if there were other ways to achieve that aim.</p> <p>Better market regulation and profit guarantees for other players were also options for the government to bolster the regional travel game.</p> <p>But in Victoria's northwest corner, news of a potential buyout was great relief for residents in Mildura, home to the state's second-busiest airport after Melbourne's Tullamarine.</p> <p>"Air travel is a lifeline for us," Mildura Rural City Council Mayor Helen Healy said.</p> <p>Mildura has no passenger train and is 600km from the state's capital, while its airport is served solely by Rex and Qantas.</p> <p>"If we only had one airline, we'd be at the mercy of whatever a single airline wanted to charge," Ms Healy said.</p> <p>Rex was given substantial government help in the form of JobKeeper payments and direct funds under the former coalition government, but it spent much of that money on an ill-fated expansion into capital-city routes.</p> <p>Transport Workers Union national secretary Michael Kaine welcomed the government's announcement and said questions over whether Australia was big enough for three major airlines missed the point.</p> <p>"The right question is, what do we have to do as an Australian community to ensure there are three airlines, and that one of them is a good regional operator?" he said.</p> <p>But if the Commonwealth was going to get in on the embattled airline, it must also have a plan to get out, Swinburne University law and corporate governance specialist Helen Bird said.</p> <p>"It needs to be until a buyer can be found ... they need to make the business viable and appropriate, and then there will be interest," she said.</p> <p> </p> </body>