By Staff reporter
Rex Airlines’ future is up in the air as the company grapples with boardroom turmoil, a stoush with its biggest shareholder, and speculation that restructuring experts Deloitte have been appointed to the group.
Rex, the nation’s third-largest airline, sought a trading halt in its shares until Wednesday, after The Australian reported that Deloitte restructuring partners Sal Algeri and Richard Hughes, who worked on Virgin Australia’s administration, had been appointed to the company.
Rex Airlines has suffered a boardroom brawl and there is now speculation that restructuring experts Deloitte have been appointed to the company.
Prime Minister Anthony Albanese on Monday said the federal government was seeking information from Rex on its financial situation and will keep a close eye on the situation as it unfolds.
“I’m very hopeful that they’ll see their way through,” he told ABC Afternoon Briefing. “We have sought information from the airline through Minister Catherine King, who came to see me about this today. And through the department we will continue to monitor what happens there.”
Rex flies to 56 destinations, including between the cut-throat markets of Sydney, Melbourne and Brisbane. In June, it began offering one-way fares as low as $99 between Melbourne and Perth in an effort to steal market share from its bigger rivals Qantas and Virgin.
The airline also owns air freight, aero medical and charter operator Pel-Air Aviation, the Australian Airline Pilot Academy in Wagga Wagga and Ballarat and also a propeller maintenance organisation. Additionally, it has a 50 per cent stake in National Jet Express, which is a fly-in-fly-out charter and freight operator.
Earlier this year, Rex had announced it was partnering with Etihad, which enabled Rex’s domestic flights to connect with the Middle East operator’s global network.
Rex has been narrowing its losses since the pandemic hit, which roiled airlines globally. In its first half results, released in February this year, Rex grew its total revenue 4.6 per cent. It reported a half-year loss of $3.2 million, which had narrowed from a loss of $16.5 million in the previous corresponding period.
Rex, formerly known as Regional Express, was contacted but in a statement a spokesperson said it wasn’t appropriate for them to make any comment.
Opposition transport spokeswoman Bridget McKenzie accused Transport Minister Catherine King of dithering over reforms to aviation, perpetuating a lack of competition in the sector.
“It is time this government pulled its head out of the sand and starts pulling on the levers to foster more competition, better reliability and more affordable airfares in Australia,” she said in a statement.
“Two aviation companies control more than 93 per cent of the domestic space and companies like Rex create more competition which means cheaper airfares across the board.”
The Transport Workers’ Union said Rex’s trading halt illustrated the need for a commission to oversee aviation.
“We know healthy competition is the only remedy for an industry in crisis,” the union’s national secretary Michael Kaine said.
In early June, the company issued a statement that Neville Howell, who was the company’s chief operating officer, had been appointed as chief executive for two years, and that John Sharp had been elevated to chairman from deputy chairman. Howell was previously a board director but had stepped down in March.
John Sharp, the chairman of Rex Airlines, on his Southern Highlands property in Exeter.Credit: Janie Barrett
In that same statement, it was revealed that Lim Kim Hai, who owns almost 17 per cent of Rex, was removed as its executive chairman - a role that he had held for 21 years. He remained on the board as a director.
The company did not explain the reason for Lim’s removal.
Five weeks later, Lim, as a major shareholder, requisitioned a shareholder meeting to remove four Rex directors, including Sharp. In their place, Lim proposed appointing Lim Kang Song and Mukul Soul as directors.
The company said it would update the market on that boardroom brawl, but there has not been any notification apart from the trading halt. Another director Sid Khotkar had resigned from the company in April.
Sharp, a former transport minister in the Howard government, was contacted for comment.
With AAP
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