Australian airline Regional Express Holdings Ltd (REX) <REX.AX> is exploring the feasibility of operating between major cities and is in talks with potential partners for an equity investment estimated at A$200 million ($129 million), it said on Wednesday.
The regional turboprop carrier's interest in big-city operations comes after the second-biggest airline, Virgin Australia Holdings Ltd <VAH.AX>, last month entered voluntary administration and is up for sale.
The REX board expects to make a decision in the next eight weeks on whether to proceed, the airline said in a statement, adding that operations would start on March 1, 2021 if it decides to go ahead.
REX, which has a market value of A$100 million, said it had been approached by several parties interested in providing the equity but did not name them.
Australia's domestic aviation market is a duopoly dominated by Qantas Airways Ltd <QAN.AX> and Virgin Australia. Before the coronavirus pandemic grounded most flights, Sydney-Melbourne and Sydney-Brisbane ranked among the world's busiest domestic routes.
REX currently operates on less competitive regional routes like Sydney-Wagga Wagga and Adelaide to Port Lincoln using a fleet of ageing Saab 340 turboprops with 30 to 36 seats.
Non-binding indicative offers for Virgin Australia are due on Friday and 19 parties have entered a data room to access confidential information, according to an affidavit from its administrator published on Tuesday.
($1=A$1.5475)
(Reporting by Jamie Freed; Editing by Clarence Fernandez and Christopher Cushing)
