US Aviation Firm Air T Acquires Australia's Rex Airlines, Ending Lengthy Administration

Acquisition Finalizes Rex's Future

Air T, Inc., a US-based aviation holding company, has officially agreed to acquire Regional Express Holdings (Rex Airlines), an Australian regional carrier. This agreement marks a significant step towards bringing Rex out of a lengthy voluntary administration period that began in July 2024. The deal, formalized through a Sale and Implementation Deed, is expected to close by the end of 2025, pending creditor and regulatory approvals, including the Federal Court of Australia.

Government Intervention and Financial Restructuring

The acquisition follows extensive efforts by administrators EY Australia to find a buyer for the struggling airline. The Australian Government played a crucial role in facilitating the deal, having previously acquired AUD50 million of Rex's debt from its largest creditor, PAGAC Regulus Holdings Limited (PAG), making it the principal secured creditor. Additionally, the government provided an AUD80 million loan to maintain Rex's regional routes during administration. Federal Transport Minister Catherine King welcomed the announcement as a 'positive step towards bringing Rex out of voluntary administration' and confirmed an agreement with Air T to restructure Rex's financing arrangements. This intervention aims to ensure the continuation of critical aviation links for regional communities.

Rex's Path Through Administration and Future Plans

Rex Airlines entered voluntary administration after facing severe financial struggles, exacerbated by an expansion into capital city routes that increased its debt burden. The airline currently owes approximately AUD500 million to around 4,800 creditors, with administrators indicating that no return to shareholders is anticipated, and proceeds will instead go to creditors. A key aspect of Air T's plan involves recapitalizing Rex and addressing issues with its aging fleet. Air T intends to:

• Fund engine renewals for Rex's Saab 340 aircraft.
• Return grounded Saab 340 models to active service.
• Stabilize schedules and preserve regional connectivity.

The Saab 340 fleet, comprising 57 aircraft (22 Saab 340Bs and 35 Saab 340B Plus), forms the backbone of Rex's regional operations, and limited parts availability had contributed to its financial difficulties. Air T's expertise in regional aircraft and access to Saab components are considered strategically important for Rex's revitalization.

About the Acquirer: Air T, Inc.

Air T, Inc. (NASDAQ: AIRT) is an American holding company established in 1980, with a diverse portfolio of aviation-related businesses. Its core segments include:

• Overnight air cargo services (e.g., FedEx Express feeder services).
• Commercial aircraft engines and parts.
• Aviation ground support equipment sales.
• Digital solutions.

The company also owns Kingman Airport in Arizona, which serves as a source for Saab 340 parts. Nick Swenson, CEO of Air T, stated that the acquisition aligns with their 'deep experience in regional aircraft, and long-term commitment to the sustainable growth of our portfolio of powerful businesses.' The acquisition is expected to ensure Rex continues to operate sustainably, providing critical services to regional Australians, as approximately 50% of Rex's routes are not serviced by any other carrier.