US aviation company Air T has agreed to purchase Regional Express (Rex) Airlines, which entered voluntary administration 15 months ago.

The deal terms could be announced this week, though the transaction requires approval from Rex creditors.

Rex's financial troubles stemmed from an ambitious expansion strategy where it moved from regional routes into major city markets, directly competing with Qantas and Virgin.

This expansion led to mounting debts and operational challenges.

The airline also struggled with an aging fleet of 57 Saab 340 aircraft.

Air T brings several key advantages; access to parts for Rex's decades-old Saab 340 aircraft, experience in regional aviation operations (operates FedEx flights and charter services in the US), expertise in maintenance and supply chain management.

The Albanese government has been heavily involved in keeping Rex operational because the airline provides essential connections between regional Australia and coastal cities.

Support has included up to $80 million in loans to maintain regional routes through mid-2025, acquiring $50 million of debt from Rex's largest creditor (PAGAC Regulus Holdings).

Transportation Minister Catherine King has indicated that any government support for the buyer will require commitments to maintain reasonable service levels to regional communities while ensuring value for taxpayers.

The Transport Workers Union is seeking assurances about job security and working conditions, noting that Rex workers are among the company's creditors.