Industry experts fear more than $130 million in taxpayer cash injections made to failed regional airline Rex is at risk after administrators revealed a deal to save the airline would wipe out its shareholders.

The government loaned Rex $80 million to keep the company’s planes flying after it collapsed in July 2024 and bought $50 million from another creditor, but its return on the money is uncertain after administrators EY announced Rex would be sold to US aviation firm Air T .

Ian Douglas, honorary senior lecturer for UNSW’s school of aviation, said the government had been clear it did not want to take over the airline, leaving few options after it was forced into propping up the airline to keep regional routes open.

“I don’t think anyone’s going to get money back from Rex in any way

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