Regional Express has entered a share trading halt following reports the airline planned to raise $200 million for new services between major cities.
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The airline has cut back services, including stopping all its Armidale flights, and is relying on government financial aid during the coronavirus pandemic, but now reportedly wants to compete on national air routes.
The Australian Securities Exchange announced just after 11am on Tuesday that Regional Express had requested the halt pending an announcement.
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The Australian Financial Review reported overnight that Regional Express planned to sell more shares to pay for the lease of 10 narrow-bodied jets such as Boeing 737s or Airbus A320s.
Regional Express currently runs prop-driven planes between areas like Armidale and major cities.
The airline's new venture would see it compete with Qantas, Jetstar and whatever remains of post-collapse Virgin Australia for routes between Sydney, Melbourne, Brisbane, Adelaide and Perth.
Regional Express deputy chairman John Sharp told The Australian Financial Review that the airline would also seek to hire new pilots, cabin crew and ground staff.
"We have been talking to half a dozen private equity and investment banking entities about investing in this new venture," he said.
"We are working with those parties and will narrow that down to one in the next three weeks or so."
If Regional Express can raise the required funds from investors, its new city service could reportedly take to the skies from early next year.
Regional Express was trading at 90 cents per share prior to the trading halt, valuing the entire company at just over $99 million.