Qantas Airways Ltd (ASX: ASX:QAN) is experiencing a positive shift in its share price amid the recent news of Regional Express Holdings Ltd (ASX: REX) entering voluntary administration.
On Wednesday morning, Qantas shares rose to $6.24, marking a 1.0% increase from the previous day's close of $6.18. This uptick comes as the broader ASX 200 Index also experienced a slight gain of 0.4% at the same time.
The rise in Qantas shares follows the announcement that Regional Express, a regional airline, has entered into voluntary administration. The airline's entry into administration was confirmed after earlier media speculations and a trading halt. The ASX 200 saw a 0.5% increase in Qantas shares when Rex initially halted trading, and a 1.6% rise the following day amid reports of Rex's financial troubles. This uptick in Qantas shares also reflects broader movements in the ASX industrial stock sector.
Details of Rex’s Voluntary Administration Regional Express has officially announced that it has entered voluntary administration alongside its subsidiaries, with Ernst & Young Australia appointed as administrators. The airline's decision to enter administration follows financial difficulties and market speculation about its viability.
Currently, Rex's Regional Saab 340 flights continue to operate unaffected, but flights using Boeing (NYSE:BA) 737 aircraft, which are grounded, have been canceled. To assist affected passengers, Virgin Australia has offered to transfer tickets from canceled Rex flights to its services, free of charge. The ASX has suspended trading of Rex shares, citing that the airline's financial condition no longer meets the requirements for continued listing.
Impact on Qantas and Industry Response While the immediate financial impact on Qantas is expected to be minimal, the administration of Rex, following a similar situation with Bonza, has provided some upward momentum for Qantas shares. The Qantas Group has responded by offering support to Rex’s impacted customers and staff.
Qantas has extended an offer to passengers affected by Rex's flight cancellations, allowing them to transfer their bookings to Qantas or Jetstar services at no additional cost, subject to availability. Additionally, Qantas has indicated its willingness to explore potential employment opportunities within the Qantas Group for Rex employees affected by the administration process.
The news of Rex’s voluntary administration has provided Qantas with a beneficial market position, as the airline continues to address the challenges faced by the industry.