Roughly 610 employees expected to be stood down amid administration
Around 350 employees at Rex Airlines have been stood down while hundreds more are about to be made redundant as the organisation is placed into voluntary administration, according to reports.
ABC News reported that a total of 360 more people will be made redundant at Rex Airlines, while 250 more will be made redundant in its Regional Express division, despite remaining operational.
The news came as Rex Airlines, as well as other subsidiaries under the Regional Express Holdings Ltd, entered voluntary administration.
Samuel Freeman, Justin Walsh, and Adam Nikitins of Ernst & Young Australia have been appointed Joint and Several Voluntary Administrators by the Rex Group's respective Boards of Directors, according to a media release.
It was Walsh who told Rex Airlines employees in a meeting that the business is in a "very perilous financial position and has access to almost no funds," ABC News reported.
"The business, to be very frank, is simply not viable, and administrators, after working very hard, have formed the view that [Rex Airlines] is not in a position to pay the wages of its employees moving forward," Walsh said in the meeting as quoted by the news outlet.
According to Walsh, it would also likely take months before Rex will be able to pay redundancy entitlements that it owed to staff.
"If things go very well, we're talking weeks, probably months before that happens," he said.
Meanwhile, the Transport Workers Union (TWU) said the news on Rex Airlines is "another dark day for aviation."
"We are working to secure job opportunities at other airlines and aviation companies for ground crew, cabin crew, and pilots, and have had positive conversations with Virgin Australia and ground handler Dnata," TWU national secretary Michael Kaine said in a statement.
Kaine said the focus now should be maximising jobs, securing redeployment opportunities, and ensuring that entitlements of affected employees are paid as soon as possible.
"We are calling on the Federal Government to act with an equity stake in Rex, and a Safe and Secure Skies Commission to provide a voice to workers, passengers and the community for aviation," the official said.
Rex Airlines' placement into administration came months after Australian airline Bonza also went into voluntary administration in May, which saw majority of its employees stood down.
