Australia’s third-largest airline goes into voluntary administration

Australia’s third-largest airline has filed for bankruptcy and entered voluntary administration after failing to compete with Qantas and Virgin Australia.

Regional Express, better known as Rex, has grounded all of its Boeing 737 aircraft and will cease operations between major Australian cities with immediate effect. Virgin said it would allow Rex customers with 737 tickets to transfer onto its services.

Rex said its flights to and from regional cities using smaller Saab 340 turboprop planes would continue as normal. In a statement published on the airline’s website on Tuesday evening, it said it had appointed Ernst and Young as administrators.

This comes just months after the collapse of low-cost transport start-up Bonza. But if no rescue plan is found for Rex, the outcome could be even direr as the Sydney-based airline is a lifeline to many smaller centers around the country, serving 56 destinations but many of which are isolated. The company had previously suspended trading of its shares on the Australian Securities Exchange (ASX), a clear sign of its difficulties.