Rex’s New White Knight Owners Promise to Stay in Their Lane

By Andrew Curran.

NASDAQ-listed Air T Inc, the soon-to-be new owners of Australia’s Regional Express (Rex), are styling their acquisition as a white knight purchase and say they have no plans to take on larger local competitors.

Creditors of Regional Express, which filed for administration in July 2024, recently approved an AUD50 million (USD32.3 million) offer from Air T to buy the airline, which operates scheduled turboprop flights to regional and remote towns across Australia.

“Liquidating Rex would have presented a lot of risk to regional connectivity in Australia,” said Air T CEO Nick Swenson this week. “Rex was looking for a long-term and reliable aviation partner. Air T is a permanent capital vehicle with a long-term horizon.”

Happily, Air T also has a history sourcing and supplying Saab 340 parts and engines. Regional Express operates 55 of the type, although approximately 20 are out of service for assorted reasons, including a lack of engines and spare parts.

Swenson says Air T plans to increase the number of in-service Saabs to 44 by mid-2027. “We’re refreshing the fleet and getting them back into service,” he said.

Money to get more Rex aircraft back in the air

The Australian Government, which has kept Regional Express afloat while in administration and has become its largest creditor, is extending the airline an AUD60 million (USD38.8 million) loan for engine care and maintenance, allowing more Saabs to return to service.

But Rex already owes the government around AUD120 million (USD77.6 million). The government is expected to maintain a claim of AUD90 million (USD58.2 million) against the airline while “accepting a haircut” as part of the deal.

For its part, Air T says it has secured the necessary acquisition funds from a long-standing institutional investor. The company notes Rex is cash flow positive. Unsecured creditors are expected to get zero returns but Air T says Rex can service its future debts, including the new loan, which is being made on commercial terms.

Air T says Rex will stay in its lane

The Regional Express business model is connecting regional and remote inland towns to the larger cities on Australia’s coast. Their Saab 340 network is extensive, and except for the Covid-19 era, the airline made a profit.

But earlier this decade, Rex decided to lease B737-800s and go head-to-head with larger operators such as Qantas, Jetstar, and Virgin Australia on inter-capital routes. The venture bled money and was a significant contributing factor to Rex’s decision to file for administration.

Swenson suggests Rex won’t make the same mistake twice.

“Rex will stay in its lane,” he said. “We don’t want a competitive response from anyone. We are okay as the distant third behind Qantas and Virgin Australia, upholding the longstanding reputation for serving regional Australia well.”

According to the Australian Consumer and Competition Commission, Rex’s seat capacity has decreased 21.4% over the six years from 2019. In the first half of 2023, while operating the loss-making B737 services, its domestic market share was around 4.8%. As of June 2025, Rex’s domestic market share had shrunk to 1.7%.

In exchange for its support, the Australian Government has extracted an agreement from Air T to maintain Rex’s regional and remote flights. With its pool of parts and engines, Air T says it can keep the Saabs in the air for another decade before it has to think about replacing them. 

Photo: Aero South Pacific.