By Sam McKeith in Sydney

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.

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.

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.

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.

Company land and buildings, spare parts and even a flight simulator were all potentially up for grabs, Mr Freeman said.

EY had also started contacting “a large number of likely interested parties” to find a buyer or investor for the airline.

“Some are already executing on disclosure agreements … there’s been quite some interest, which is really positive,” Mr Freeman said.

EY says the airline, which is about $500 million in debt, is in daily discussions with the federal government about the situation.

Labor figures have said they will back Rex as long as it prioritises regional flights.

An initial EY probe revealed competition in the domestic “trunk route” market was a key contributor to the financial woes, Mr Freeman said.

The airline had struggled since an aggressive move in 2021 to compete on key capital-city routes against majors Qantas and Virgin Australia.

Other contributors were a shortage of pilots that created “sub-optimal fleet utilisation”, supply chain issues and maintenance problems, according to the administrators.

The airline operates a fleet of ageing Saab 340 aircraft on regional routes.

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.

Formed in 2002, Rex is Australia’s largest independent regional airline and makes about 1050 flights a week on 45 routes.