The purchase will ensure regional communities stay connected and will keep access to essential medical and freight services.
"The Albanese government is ensuring Rex Airlines regional services will continue, supporting the administrators on next steps," Transport Minster Catherine King said in a joint statement with Finance Minister Katy Gallagher.
Rex went into administration in mid-2024 with about $500 million in debts, after a push into Australia's most competitive routes dominated by Qantas and Virgin.
Rex went into administration in mid-2024 with debts of around $500 million. (Luis Ascui/AAP PHOTOS)
The debt purchase will make the government Rex's principal secured creditor and it will seek to become a voting member on the committee of inspection.
"These actions preserve important economic, medical and freight services, supporting regional liveability and regional economies," the ministers said.
It is the second lifeline extended to the battled airline in a couple of months.
Late last year, the government provided a $80 million commercial loan to Rex's administrators to keep regional routes open, cover early entitlements for former workers and to guarantee tickets for regional routes.
In December, the corporate regulator announced it would take Rex and four directors to court over continuous disclosure breaches for failing to reveal a $35 million shortfall until days before the financial year ended.
The Australian Securities and Investments Commission is attempting to have four directors disqualified over alleged corporate governance failures.
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