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Regional airline Rex has entered voluntary administration.
The company confirmed the news in a statement on Tuesday night, following mounting speculation after it suspended share trading on the ASX yesterday.
Flights between major airports have been cancelled, with the Rex Group's domestic fleet of Boeing 737 aircraft all grounded.
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Regional Saab 340 flights are currently unaffected and will continue to operate.
Affected customers are being contacted directly by the airline.
Investors had been on tenterhooks waiting for a possible announcement relating to a news article published on the weekend.
Prime Minister Anthony Albanese earlier told the ABC he and Transport Minister Catherine King had sought more information from the airline.
He said Rex remained an "important airline", especially after the collapse of budget carrier Bonza.
"Rex is particularly important for regional communities and there are a range of communities where Rex is the only airline serving some of those destinations," he said.
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Rex announced an expansion into major destination routes in 2020, with 737 flights to capital cities including Sydney, Melbourne, Adelaide, and Brisbane.
It announced a new Adelaide-Perth route earlier this year.
The Transport Workers Union estimated 2000 jobs had been "thrown into limbo" by the trading halt.
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