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Regional flight operator Rex (ASX: REX) is considering raising $200 million in order to establish domestic Australian operations.
The new flight paths will be run in addition to its regional services which are being underwritten by the Federal Government and some state governments.
In response to an article ran by the Financial Review yesterday, Rex today has announced it is considering the feasibility of commencing domestic airline operations to compete with Virgin Australia (ASX: VAH) (currently in administration) and Qantas (ASX: QAN).
Rex says it has been approached by several parties interested in providing around $200 million worth of equity required to start domestic operations in Australia.
A decision on whether or not to proceed with the raise will be made within the next eight weeks.
"At this juncture the Rex Board believes that with sufficient capital injection, there is a confluence of circumstances which render the start of domestic operations by Rex to be a particularly compelling proposition," says Rex.
As reported by the AFR Rex would lease around 10 narrow-body jets, and will hire pilots, cabin crew, and ground staff to operate them in order to facilitate the new domestic flights.
Rex entered into a trading halt yesterday morning following pending the release of this morning's announcement and following the publication of the AFR article.
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