Focus on regional jobs and routes as Rex Airlines enters administration

The transport union has said 250 jobs will be axed from the airline's regional arm and 360 jobs would go in capital cities.

The administrators said eligible customers will be re-accommodated on Virgin Australia flights as close as practicable to their original time of travel. Holders of affected tickets should not come to the airport until they have rebooked their flights, E&Y said.

The administrators said regional Saab 340 flights "are currently unaffected by the administration and will continue to operate".

They said prepaid ticket holders will continue to have their tickets "honoured" by the Rex Group on regional routes.

Flights between major airports have been cancelled, with Rex Group's domestic fleet of Boeing 737 aircraft all grounded.

Affected customers are being contacted directly by Rex.

Virgin Australia is offering affected Rex passengers free of charge rebooking on domestic 737 services, E&Y said.

Rex and Virgin Australia are also exploring opportunities to support regional customers, which include Virgin Australia selling Rex's regional services through codeshare or interline arrangements, and making Velocity Frequent Flyer benefits available to Rex's regional customers, E&Y said.

Qantas said they "stand ready to assist" Rex customers and employees in what will be a difficult period.

Rex customers with cancelled flights can be reaccommodated on Qantas and Jetstar flights at no charge if seats are available on the same route as their original booking.

"We are also prepared to connect Rex employees with potential opportunities within the Qantas Group."

Treasurer Jim Chalmers said the government would "be prepared to play a constructive role" in helping the regional airline survive but said he didn't want to "pre-empt the options" before hearing from the company.

"Our priority here is the jobs, making sure that we can find good jobs for people, and also making sure that those regional flights continue because we know how important regional routes and regional flights are to regional communities and economies," he told ABC radio.

Transport Workers Union national secretary Michael Kaine said that hundreds of jobs at Rex Airlines were set to be made redundant.

He said administrators told him 360 jobs would go from the capital cities operation, which was being wound up, and 250 jobs would be axed from the airline's regional arm, despite it continuing to operate.

"This is another dark day for aviation, with over 600 families faced with sudden joblessness in an industry that has taken hit after hit," Mr Kaine said.

"We are calling on the federal government to act with an equity stake in Rex, and a Safe and Secure Skies Commission to provide a voice to workers, passengers and the community for aviation."

Administrator Sam Freeman said in a press conference on July 31 the priority was keeping the regional and remote flights that Rex has operated historically "in the air".

"We have seen that continue today, and it is wonderful to see," he said.

Local Government NSW president Darriea Turley said losing regional flights would have a "devastating" impact on rural and regional communities.

"One of the key determinants of populations remaining in regional and rural areas is access to reliable and regular connections to metropolitan areas," she said.

Cr Turley said the federal government should ensure no flights are cut in the regions "through whatever means is necessary".

Tasmanian premier Jeremy Rockliff said he was particularly concerned for communities with no other aviation service such as King Island.

"Many of our regional and remote communities and our Tasmanian businesses rely on our airlines to deliver essential products and services, connect them to other areas of Tasmania and the mainland and provide freight, mail and logistics," he said.

On July 30 Prime Minister Anthony Albanese said the federal government would "examine any proposals" after Rex Airlines was placed in a trading halt.

Mr Albanese said Rex received "substantial government support with no conditions attached" and questioned whether Rex should have moved beyond regional routes.

Rex "moved away from their traditional role of being a regional airline into flights, for example, from Sydney to Melbourne. Now, Sydney to Melbourne has been always in the top ten routes in the world and at one stage was the highest number of flights of any two destinations in the world. It consistently has been in the top four.

"Now Rex as a regional airline, of course, provides important links with regional communities, and particularly between capital cities and regional communities. It's important for those local economies," Mr Albanese said.

After the ASX trading halt on July 29, Mr Albanese said he believed the airline would "see their way through".

"One of the things that we need to do is make sure that we have a viable and ongoing Australian aviation industry," he said.

Mr Albanese said "Rex is particularly important for regional communities, and there are a range of communities in NSW, in Queensland, in South Australia and right around the country that rely upon Rex, where Rex is the only airline to go to some of those destinations, so it's important".

Rex flies to 56 destinations including many in regional Australia such as Port Macquarie, Coffs Harbour, Orange, Dubbo and Albury in NSW, Mount Gambier in South Australia, Burnie and Devonport in Tasmania, Cairns and Mt Isa in Qld and Mildura in Victoria.

It comes as budget carrier Bonza was permanently grounded after creditors voted to liquidate the embattled airline with staff still owed millions of dollars.