Rex Airlines placed in ASX trading halt amid rumours of financial strife

The regional flyer has been temporarily suspended from trading on the ASX following rumours the company had engaged financial services firm Deloitte.

Rex Airlines has been placed on a trading halt on the ASX following rumours of continued strife and internal tension.

Confirmation of the temporary suspension was shared in an announcement made to the ASX on Monday at 9.50am, with the message directly referencing a news report made in The Australian’s Margin Call column that reported tensions among its directors and said Rex had employed financial services firm Deloitte for advice.

The halt will remain in place until Rex announces a reversal.

“(Rex) requests the securities of the company to be placed in an immediate trading half pending a material announcement in relation to a news article published on Saturday, 27th July, 2024,” the statement said.

“Rex advises the trading halt is to last until the commencement of trade on Wednesday, July 31 or until the announcement mentioned above has been made.”

The regional carrier has been suspended from trading on the ASX. Picture: NewsWire/ Gaye Gerard

The regional carrier has not recorded a profit since the Covid pandemic, with fears it could suffer a similar fate to budget airline carrier Bonza, which was placed into voluntary administration in April 2024.

Speaking to ABC’s Afternoon Briefing, Prime Minister Anthony Albanese said aviation was a “tough industry,” however he was “hopeful” the company would “see their way through”.

“One of the things that we need to do is make sure that we have a viable and ongoing Australian aviation industry,” he said.

“I will always stand up for Australian Airlines. It is important that we do that and it is a competitive industry globally and every single year there wouldn’t be a week go past where an airline somewhere in the world doesn’t get into trouble.”

Mr Albanese said Infrastructure and Transport Minister Catherine King had sought more information from the airline and his government would continue to monitor the situation.

“Rex is particularly important for regional communities,” he said.

“There are a range of communities in NSW, Queensland and South Australia and right around the country that rely on Rex, where it is the only airline to go to some of those destinations.

“They have come through Covid and received substantial government support and we will remain vigilant when it comes to this airline and continue to work with them.”

The prime minister said he was ‘hopeful’ the predominantly regional carrier would see it’s way through. Picture: NewsWire/ Gaye Gerard

In a statement shared on Monday, the Transport Workers’ Union appeared to confirm the airline had engaged with Deloitte administrators, with the union vowing to help return Rex to good financial standing.

The TWU called for more regulatory oversight from the Safe and Secure Skies Commission, especially when it came to monitoring potentially anti-competitive behaviour from Qantas.

“Like Bonza, Rex was another airline attempting to do right by the Australian public, keeping regional communities connected and driving down fares on popular routes,” TWU national secretary Michael Kaine said.

“Following complaints against Qantas of capacity dumping, slot hoarding and a bidding war in regional Australia, Rex has now become another victim of an unregulated aviation market.

“The TWU worked with Deloitte to get Virgin Australia back in the air and will work just as hard with them again to try to rescue Rex Airlines.

“Despite multibillion-dollar Qantas claiming there’s no room for competition, we know healthy competition is the only remedy for an industry in crisis.”