Administrators for beleaguered regional airline Rex say the company is half a billion dollars in debt.

The airline, also known as Regional Express, was placed into voluntary administration late on July 30, after grounding its services between major cities.

The first creditors meeting, held by administrators from consultancy giant Ernst & Young (EY) on Friday, heard that Rex's debts totalled $500 million, owed to 4,800 creditors.

Several creditors are former employees of the airline, who were told it could take months before they are paid their entitlements.

A consultation process with staff began on July 31 and employees began receiving termination notices that night.

By August 2, the airline had sacked 594 staff, including 343 employees from its capital city routes, serviced by its Boeing 737 aircraft.

Another 251 staff have been terminated from across other parts of the business, including its regional division, which is still continuing to operate.

Administrators also told creditors that the capital city services were not viable and would not resume, even if a buyer for that division of the business is found, with all of the Boeing 737 aircraft returned to their lessors.

However, administrators are confident that Rex's regional business will continue.

A sales process for Rex's regional operations began on Friday, with administrators selling the business as a fully operational regional carrier.

Administrators have previously stated that they had been inundated with interest from several parties about purchasing the business since the Rex entered administration.

Administrators still investigating how Rex accrued high debt

During the meeting, administrators said they were still investigating what caused the company to accrue so much debt, and whether the airline was trading while insolvent.