The Australian government has pledged increased financial support to assist struggling regional carrier REX Airlines, aiming to prevent the airline from collapsing. This decision was announced on January 23, 2025, when it was revealed that the Australian administration would be committing A$50 million (approximately US$31.3 / €30.1 million) to acquire guaranteed debt from REX's largest creditor, PAGAC Regulus Holdings (PAG), a private equity firm. By becoming the airline’s primary creditor, the government will secure a voting position on REX's Committee of Inspection.

This strategic move provides REX with much-needed financial relief, enabling the carrier to sustain its regional services while actively seeking new investors. The airline had previously received support in the form of an AU$80 million (US$52.3 million / €50.2 million) loan earlier in November 2024, along with guarantees for passengers holding tickets during the administration period. Despite the substantial aid, the debt purchased by the Australian government only accounts for 10% of REX Airlines' total liabilities, which stand at approximately A$500 million (US$310 / €301.4 million).

The decision to intervene and prevent REX Airlines from financial collapse stems from its crucial role in maintaining air connectivity for numerous rural communities across Australia, rendering the carrier's continuity a politically sensitive issue. Following the cessation of low-cost startup airline Bonza and REX Airlines' discontinuation of its B737 services in 2024, the Australian air travel market saw a decline in competition, effectively resulting in a duopoly. Qantas, along with its subsidiary Jetstar, and Virgin Australia now dominate more than 95% of the domestic market, mainly serving major routes. Meanwhile, smaller carriers like REX Airlines and Alliance Airlines cater to niche rural markets and remote mining communities.