REGIONAL Express has gone into voluntary administration and cancelled all flights between major city airports, although regional flights are operating as usual.

A statement posted on Rex’s website late on Tuesday said the administration affected parent company Regional Express Holdings Limited and a number of its subsidiaries trading under the Rex Group name.

Samuel Freeman, Justin Walsh and Adam Nikitins of Ernst & Young Australia have been appointed joint administrators by the Rex board.

Rex’s regional Saab 340 flights are unaffected and will continue to operate, but its domestic 737 services between major cities have been halted.

Virgin Australia is offering impacted customers with tickets on cancelled flights the chance to transfer free of charge to its service.

“Flights between major airports have been cancelled, with the Rex Group’s domestic fleet of Boeing 737 aircraft all grounded,” the statement said.

“Affected customers are being contacted directly by Rex.”

Rex and Virgin Australia are also exploring ways to support regional customers, including Virgin selling Rex’s regional services through codeshare or interline arrangements, and making Virgin frequent flyer benefits available to Rex’s regional customers.

“The Rex Group has a long and proud history of servicing regional and remote communities across Australia,” it said.

Virgin Australia chief executive Jayne Hrdlicka said it was “a difficult moment for Australian aviation”.

“Our team is now moving quickly to support Rex’s customers and people,” she said after Rex’s announcement.

“Impacted Rex customers will be supported with rebooking on an equivalent Virgin Australia service free of charge.”

Virgin is also offering affected Rex employees the chance to apply for open positions via the airline’s website, she added.

Ms Hrdlicka said Virgin intended to partner with Rex’s regional business to enable “seamless access” to Virgin Australia’s domestic and international destinations through potential codeshare or interline arrangements in the future.

“The team at Virgin Australia are thinking about everyone at Rex today, an airline with a proud and important role in Australian aviation, particularly for regional Australia,” she said.

Rex, which employs about 2000 people, began servicing Sydney-to-Melbourne, one of the busiest routes in the world, in 2021.

Its shares went into a trading halt on the Australian stock exchange on Monday in the wake of recent boardroom turbulence and multimillion-dollar earnings losses.

On Tuesday, Prime Minister Anthony Albanese questioned the carrier’s expansion into major capital city routes.

He noted Rex had received substantial public funding during the pandemic with “no conditions attached”.

“One of the things I expressed concern about was having no conditions, so Rex, for example, moved away from their traditional role of being a regional airline into flights, for example, from Sydney to Melbourne,” Mr Albanese said.

Nationals senator Bridget McKenzie said Rex’s foray into the capital cities market, including a recent Melbourne-to-Perth route, had increased competition between aviation players resulting in cheaper fares being offered by Qantas.

“Let’s not continue to pretend that Qantas’s behaviour is acceptable in the aviation industry,” Senator McKenzie said.

“Every time they are challenged they seek to monster those airlines like Rex… who have sought to actually give Australians another way of travelling.”

Unlike Bonza, which went into voluntary administration in April, Rex mainly owns rather than leases its planes.

Its key fleet comprises 61 SAAB 340s and seven leased Boeing 737-800s, out of 123 aircraft.

Many regional communities rely on the carrier, which emerged 22 years ago following the collapse of Ansett.

Since COVID-19, Rex has struggled with profitability.

In February, it reported a bottom line net loss of $3.2 million for the first half of the 2023/24 financial year.

Rex shares last traded at 56.5 cents on Friday.

They were around 79 cents a month ago.

By Jack GRAMENZ, Holly HALES and Adrian BLACK, AAP