Wagga Wagga City Council is unlikely to see any financial return from Rex Airlines, despite paying to keep the airliner at its airport. Photo: Rex Airlines.
Wagga Wagga City Council is “unlikely” to see its share of the nearly $500 million Rex Airlines owes its 4800 creditors.
Rex Airlines, which went into voluntary administration in July 2024, recently announced an American company, Air T, would purchase the regional airline following 15 months of federal government bailouts.
Despite Rex owing $500 million to creditors, who have kept the airliner running for more than a year, Ernest and Young, the accounting and auditing company administering Rex, announced it was unlikely any of Rex’s shareholders would be paid back, which includes Wagga Wagga City Council.
“The administrators would like to thank the Australian Government for their support to date in assisting to facilitate the proposed transaction”, adding the sale proposal would be put to creditors in “the next few weeks”.
“No return to shareholders is anticipated,” it added.
“An update will be provided ahead of the second meeting of creditors of the group, which is currently anticipated to be held within the current convening period of the administration.”
Wagga Wagga City Council released a short statement stating that it was still yet to hear from the airliner about the sale, or if it would receive any of its money back.
“Wagga Wagga City Council is aware, through media coverage, that the administrators of Rex Airlines have named a buyer of the airline. Council has not been contacted by the administrators or any other person in relation to the proposed sale or the terms of the proposed sale,” the statement reads.
“When Rex Airlines was placed in administration, it owed money to Wagga Wagga City Council for operating fees at the airport. This debt is unsecured, and council is one of many unsecured creditors identified in the company administration.
“Council is not aware whether any of the debt will be paid as an outcome of the administration.
“It is expected that at some point the administrators will reach out to unsecured creditors, including council, with information about whether any or all of the unsecured debts will be paid if the proposed sale proceeds.”
Despite the significant debt, Member for Riverina Michael McCormack said the airliner finding a buyer was a win for regional Australia.
“This is good news. This is very welcome news,” Mr McCormack said.
“It does provide that hope for so many people. Because had it gone beyond December and the government then pulled their bailout procedures, that would have spelled disaster.
“People who need to be able to fly to Sydney, fly to Melbourne, use those air services for medical appointments, particularly. It also gets frontline medical staff into Wagga Wagga, including psychologists, physiotherapists, and neurologists. We do rely very much on having a competitive airline access to ensure that we get those services and relief.”
