The Transport Workers’ Union on Tuesday said the federal government must ensure that Rex is not allowed to go the way of Bonza, with around 2000 jobs potentially at risk.

“We are of the view that we cannot let Rex fail,” the union’s national secretary Michael Kaine told ABC Radio National on Tuesday.

“Rex has carved out an existence despite the massive commercial and competitive dominance of Qantas, and we might be seeing here once again the pressure of that dominance is squeezing Rex out, and we hope that is not the case.”

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, 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.

Rex has been narrowing its losses since the pandemic hit, which roiled airlines globally. In its first yearly half results, released in February this year, Rex increased its total revenue by 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.

Lim Kim Hai stepped down as the chairman of Rex last month but has now called for other directors to go.

Lim Kim Hai stepped down as the chairman of Rex last month but has now called for other directors to go.Credit: Louie Douvis

The airline has also recently had to contend with boardroom ructions. 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.

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.

Bloomberg L.P. and staff reporter

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Leave a Reply

Your email address will not be published. Required fields are marked *