Councils Thrown Lifeline to Recover Rex Airlines Debts

In Short

• Debt Recovery: A $5 million federal grant pool is now open for regional and remote airports to recover unpaid fees from Rex’s 2024 voluntary administration.
• Critical Deadlines: Impacted councils must submit their applications by 17 March 2026 to be eligible for the Regional and Remote Airport Support Program.
• Securing the Future: The funding follows the successful 100% acquisition of Rex by US-based Air T, ensuring essential flight paths to the Back Country remain open.

Regional councils across the Back Country have welcomed the opening of a $5 million federal grant program designed to settle the unpaid bills left in the wake of Rex Airlines' 2024 financial collapse.

The Regional and Remote Airport Support Program (RRASP) officially opened for applications this week, offering a long-awaited path for local government-owned airports, many of which operate at a loss, to recoup unsecured debts.

Australian Local Government Association (ALGA) President, Mayor Matt Burnett, said the funding is a direct result of councils across Australia making their voices heard.

"We’re grateful that the Federal Government has listened to the councils who were left with unpaid bills after Rex’s voluntary administration," Mayor Burnett said. "These airports and aerodromes are critical to local economies and ensure connections to friends, family, and essential services."

For rural airport operators, the collapse in mid-2024 created a period of extreme uncertainty. Many airports continued to provide fuel, landing strips, and ground services to Rex without payment to ensure residents weren't cut off from the rest of the state.

Simon Westaway, CEO of the Australian Airports Association, noted that many of these facilities were already struggling with ageing infrastructure and rising security costs.

"These funding applications are an important step for regional and remote airports that carried financial risk to help keep essential air services operating during a highly uncertain period," Mr Westaway said.

The grants follow the finalisation of Rex’s sale to US-based firm Air T, which officially took 100 per cent ownership of the carrier in late 2025.

Supported by a $60 million commercial loan and a restructure of $108 million in government debt, Air T has committed to a Return to Classic Rex initiative. This plan aims to restore the full fleet of 45 Saab 340 aircraft to service within the next two years, safeguarding the regional routes that our communities rely on.

While the $5 million pool is a welcome fix for past debts, ALGA is using the moment to renew calls for more sustainable long-term funding. Mayor Burnett is pushing for federal Financial Assistance Grants to be restored to at least one percent of Commonwealth taxation revenue.

"With limited rate bases, councils are feeling the pressure of trying to maintain and modernise their airports," he said.

Applications for the debt recovery grants close at 5:00 pm AEDT on 17 March 2026.