Regional airports welcome government payout decision

By Andrew Curran.

Regional airports have welcomed the Australian Government’s decision to cover Regional Express (Rex) debts stemming from its 2024 collapse. Earlier this week, the government confirmed it had paid AUD4.8 million (USD3.4 million) to 34 regional and remote airports left out of pocket by Rex’s collapse.

Transport Minister Catherine King said the funding was “another demonstration of our unwavering support for regional and remote aviation”.

A spokesperson for the Australian Local Government Association (ALGA) told Aero South Pacific that the “funding recognises the significant financial pressure councils faced following the collapse of Rex”.

Regional Express filed for bankruptcy in July 2024 after an ill-fated foray into operating B737s on major Australian trunk routes. However, its core business involved operating scheduled turboprop services into regional and remote towns. The airline, now under new ownership, continues to operate those flights.

The majority of airports in these towns are owned and operated by local governments.

Regional airports vital economic and social infrastructure

Rex flies to 56 airports around Australia. Five of these are capital city airports and another two, Cairns (CNS) and Townsville (TSV), are substantial infrastructure assets owned by investment funds. However, most of the remaining 49 airports are local government facilities.

“Regional airports are often not commercially profitable, but councils continue to operate them because they are vital economic and social infrastructure for their communities,” the ALGA spokesperson added.

“In many areas, councils effectively step in to provide a service that would otherwise not exist.”

Mildura Airport (MQL) in north-western Victoria is one of Australia’s larger and better-resourced local government airports. It processed approximately 187,700 passengers during calendar year 2025 and is served by QantasLink from Sydney (SYD) and Melbourne (MEL), and Regional Express from Melbourne.

In 2024, Mildura Airport accumulated two bad debts in quick succession when Bonza and Rex filed for bankruptcy within three months of each other.

Bonza ceased operations entirely. Rex did not, but it still owed Mildura Airport AUD170,584 (USD121,865).

Mildura Airport CEO Andrew Elliott said the government funding recognises the impact of Rex’s administration process on regional airports and provides important support for outstanding amounts owed.

“Unlike larger airports, regional airports operate with lower passenger volumes and smaller revenue bases, which can place considerable financial pressure on airport operators and regional councils,” he said.

“The continued support and recognition from government of the importance of regional aviation is critical to ensuring these communities remain connected and accessible into the future.”

Long hangover from Rex’s collapse

The Australian Government financially supported Regional Express while it moved through the bankruptcy process. In doing so, it became Rex’s largest creditor. Partly, this reflected the political reality that allowing Rex to cease flights to many of the regional and remote airports it served would have been untenable.

That support, which was not extended to other scheduled passenger airlines, raised eyebrows within the aviation industry.

“There was certainly a very different federal government response and outcome to the Rex administration versus that of Bonza,” former Bonza CEO Tim Jordan said in a recent interview.

Jordan said the Australian Government “determined very rapidly” that it would not step in to assist Bonza when it entered administration in late April 2024.

RAAA welcomes airport payouts

In February this year, Regional Aviation Association of Australia (RAAA) chairman Malcolm Sharp told an Australian Senate committee hearing that the level of financial support Rex had received over the years from all levels of government “was perplexing”.

This week, RAAA CEO Rob Walker struck a more diplomatic tone and said the group, which represents 15 scheduled passenger airlines among its wider membership, welcomed the recent payout announcement.

“The RAAA hopes that this financial relief will assist regional airports to maintain aviation services for regional airlines, support ongoing operations, and help keep fees and landing charges down,” he told Aero South Pacific.

“Regional aviation continues to be challenging for all operators,” Walker added. “Margins are razor thin. The RAAA will continue to advocate with government to support all regional airlines that provide vital services to the people of regional and remote Australia.”

Minister King said the payments to the 34 airports were made through the Regional and Remote Airport Support Program. She said 95% of claims were assessed as eligible and 100% of eligible claims were covered.

You can read the full list of airports and their claim amounts here.

Photo: Aero South Pacific.

Contact the writer: andrew@aerosouthpacific.com