REX AIRLINES Trading Halt
Joined: Sep 2024
Posts: 32
Likes: 13
From: Australia
I say gaol time for these so called 'direcrors', and that grub of a CEO as well (I thought he was a director but that may have changed due to his CEO appointment).
Won't happen, ASIC will 'sue' them by slapping them with a wet fish and they will have to pay some paltry tokenistic amount for a crime that is hundreds/thousands of times worse.
Won't happen, ASIC will 'sue' them by slapping them with a wet fish and they will have to pay some paltry tokenistic amount for a crime that is hundreds/thousands of times worse.
If I remember correctly, the grotty CEO stepped down from the board in March 2024. He was most ruffled by the speculation as to why from what I’ve been told. I also hear he’s also been extremely hesitant to admit he had been on the board. I hope there will be repercussions for his involvement at some stage.
Joined: Apr 2010
Posts: 375
Likes: 65
From: Brisbane
On 21 March 2023, Lim received the year-to-date and monthly profit-and-loss figures for the Rex Group for February 2023, and Rex was thereby aware that the Rex Group had incurred an operating loss of approximately $46.2 million,” ASIC has alleged in documents filed with the NSW Supreme Court.
“On 14 April 2023, Lim made a request by email to [Lincoln] Pan and [Sid] Khotkar (copying Sharp) requesting $10 million in funding from PAG, describing the company’s cash reserves as ‘critically low’, domestic sales as ‘disappointingly and bewilderingly bad’, the February results as having ‘crashed’ and a lack of recovery in March.”
Lim’s email to his fellow directors included a spreadsheet showing Rex had recorded a before-tax loss of $7.2 million in February and an estimated before-tax loss of $2.5 million for March 2023.
“On 14 April 2023, Lim made a request by email to [Lincoln] Pan and [Sid] Khotkar (copying Sharp) requesting $10 million in funding from PAG, describing the company’s cash reserves as ‘critically low’, domestic sales as ‘disappointingly and bewilderingly bad’, the February results as having ‘crashed’ and a lack of recovery in March.”
Lim’s email to his fellow directors included a spreadsheet showing Rex had recorded a before-tax loss of $7.2 million in February and an estimated before-tax loss of $2.5 million for March 2023.
The leaks in the boat got harder to fill!
Joined: Jan 2006
Posts: 2,535
Likes: 224
From: Sydney Australia
Putting aside all the corporate skullduggery and general maleficence with regard to their obligations to the market and the regulator, the statement by Lim describing Domestic sales as "disappointing and bewilderingly bad", shows just how delusional they were to the viability of the Jet operation. Any Jet operation!
To be clear, this is not a case of wise in hindsight. All but the most inward looking narcissistic and Hubris afflicted management would have been able to see that this little adventure was doomed from the start. For God's sake, the very case they pitched to the ASX for launching a domestic jet operation had evaporated some 3 months before REX were obliged to commit. That being the saving of Virgin Australia by Bain.
They were not only allegedly dishonest, but breathtakingly stupid!
To be clear, this is not a case of wise in hindsight. All but the most inward looking narcissistic and Hubris afflicted management would have been able to see that this little adventure was doomed from the start. For God's sake, the very case they pitched to the ASX for launching a domestic jet operation had evaporated some 3 months before REX were obliged to commit. That being the saving of Virgin Australia by Bain.
They were not only allegedly dishonest, but breathtakingly stupid!
Joined: Jul 2009
Posts: 569
Likes: 383
From: Australia
Does anyone here actually trust politicians? No, thought not.
Once the election is done we may see a change in attitude towards REX, despite whoever wins. The complexities of saving a heavily foreign owned and controlled regional airline as opposed to letting “nature take its course” will probably be the deciding factor.
Bonza, Tiger, VA, Ansett! And yet REX is somehow different!
Once the election is done we may see a change in attitude towards REX, despite whoever wins. The complexities of saving a heavily foreign owned and controlled regional airline as opposed to letting “nature take its course” will probably be the deciding factor.
Bonza, Tiger, VA, Ansett! And yet REX is somehow different!
Difference with ZL is that there are many routes where they have no competitor and that are subsidised to ensure there is a service, presumably because it would be uneconomical to run otherwise and no one is rushing to put their hand up, leaving the regions affected stranded. For those who say that the 'market should sort it out' - the market won't. The 'market' is only interested in profit and to mount such services and make them sustainable would mean prices through the roof - that's why the government (of any stripe) subsidises it in the first place.
I don't have a problem with that, the same as I don't have a problem with the government using funds to build the NBN (I just wish the intervening government hadn't screwed it up and spent billions more to build an inferior NBN, leaving the incumbents now, to string the fibre between all the places where the predecessors ran it to, short of the premises, to make it what it was supposed to be) because it's called being a 'society'. It's why we all pay a certain amount as a levy to our taxes, based on our means, so that people who wouldn't be able to afford medical services have them provided. The contrast to that is the USA, where they don't give a crap and you just die in the gutter or lose your house.
It's why we're called the "Commonwealth" of Australia. The 'founding fathers' so to speak very deliberately chose that title, and were met with vehement objection from Westminster and the Palace, citing some nonsense about Cromwell executing a (treasonous) king, as if any of them were alive 300 years earlier when it happened). In a rare display of 'up yours' for that time, when we otherwise did everything 'Mummy' told us, the Federation movement said 'bugger off' essentially and the title was adopted officially, regardless. Completely off-topic to the subject of the thread I know, but the history of federation is quite amazing - I only recently discovered that original drafts of our constitution included a requirement that State Governors "shall be elected by the people" and similar was considered for Governors-General. These provisions were removed in later drafts for various reasons, and for compromises in other areas.
Thread Starter
Joined: Dec 2001
Posts: 615
Likes: 182
From: Melbourne
Why can’t the government have some guts and do a subsidy deal with QantasLink for those routes and let the corpse die out of good?
Joined: Dec 2001
Aviation Qualifications: ATPL
Posts: 4,419
Likes: 853
From: Brisvegas
Difference with ZL is that there are many routes where they have no competitor and that are subsidised to ensure there is a service,
Joined: Oct 2007
Posts: 3,628
Likes: 1,183
From: Aus
Agreed, but why does that foreign-owned decayed ZL deserve special treatment/consideration? Why can’t the government have some guts and do a subsidy deal with QantasLink for those routes and let the corpse die out of good?
Secondly, Qantaslink is not interested in Rex routes, it will probably pull out of half a dozen routes it entered just to stick the boot in, but don't make commercial sense with Q400s. It's possible they will pull out of SA all together again without having the need to compete with Rex. The government would have to offer QLink criminal amounts to get their interest in the routes, they probably already have asked that question and don't like the figure QLink answered, hence $80mil to Rex was the cheaper option. The last tender for the WA routes, Rex was the sole tender, and similar for a lot of the QLD routes. So not only is Rex the only operator on those routes, but also the only one that wanted to bid on them, which probably says if they were deregulated, Rex would still be the sole operator.
Joined: Jan 2006
Posts: 2,535
Likes: 224
From: Sydney Australia
However, you never know?
Joined: Jul 2009
Posts: 569
Likes: 383
From: Australia
The general thrust of my answer was in response to REX being different. I was just pointing out that in that aspect, they are. I have no particular preference for putting a ventilator on something that is not worth saving, if the regions can otherwise be looked after.
Joined: Jul 2003
Posts: 3,381
Likes: 532
From: Somewhere
For those who say that the 'market should sort it out' - the market won't. The 'market' is only interested in profit and to mount such services and make them sustainable would mean prices through the roof - that's why the government (of any stripe) subsidises it in the first place.
It also creates moral hazard and a host of other issues along with pork barreling come election time. This whole REX saga is a classic example of why the government needs to stay out of business. They should go broke and let it start again with whomever wants to fly to these towns.
The issue with the whole subsidy concept is for how long and how much do you subsidise something that is unaffordable? Why don’t we subsidise the Sydney housing market because that is unaffordable too? If people want to live in the regions that’s fine, it’s cheap, great quality of life etc etc but due to low volume airfares will be relatively expensive. That’s just reality.
Joined: May 2010
Posts: 446
Likes: 78
From: australia
Well they did (briefly) compete on 3, but Rex didn't like them moving in on their cosy little racket with Kingscote (Kangaroo Island) so threw their toys out the pram in true Rex fashion and pulled out of the route.
Joined: May 2010
Posts: 446
Likes: 78
From: australia
The market will sort it out. I don’t understand why the regions are always Koala Bears when it comes to aviation. City folk pay the ‘market’ price for everything including airfares. Yet the regions who have affordable housing, subsidised infrastructure with no toll roads, subsidised medicine also want government funded airfares as well?
It also creates moral hazard and a host of other issues along with pork barreling come election time. This whole REX saga is a classic example of why the government needs to stay out of business. They should go broke and let it start again with whomever wants to fly to these towns.
It also creates moral hazard and a host of other issues along with pork barreling come election time. This whole REX saga is a classic example of why the government needs to stay out of business. They should go broke and let it start again with whomever wants to fly to these towns.
You can't just say "tough ****, move to the city then if you can't afford it". You do realise the country's economy and prosperity doesn't just rely on the east coast?
We have a huge farming industry in regional/remote areas along with many others and the people who make it happen shouldn't just be stranded without reasonable means of transport to the outside world.
People in the regions also pay the same for their access to mobile networks as those in the cities but it costs Telstra (or Optus) a huge amount more to provide that service so even instances where there are no subsidies, city folk are subsidising those in regional/remote areas. Yes I also acknowledge that these days many remote Telstra & Optus sites have also been subsidised by the government, but once again it is for the greater good of the nation.
Joined: Aug 2018
Posts: 98
Likes: 33
From: Not far away
The market will sort it out. I don’t understand why the regions are always Koala Bears when it comes to aviation. City folk pay the ‘market’ price for everything including airfares. Yet the regions who have affordable housing, subsidised infrastructure with no toll roads, subsidised medicine also want government funded airfares as well?
It also creates moral hazard and a host of other issues along with pork barreling come election time. This whole REX saga is a classic example of why the government needs to stay out of business. They should go broke and let it start again with whomever wants to fly to these towns.
The issue with the whole subsidy concept is for how long and how much do you subsidise something that is unaffordable? Why don’t we subsidise the Sydney housing market because that is unaffordable too? If people want to live in the regions that’s fine, it’s cheap, great quality of life etc etc but due to low volume airfares will be relatively expensive. That’s just reality.
It also creates moral hazard and a host of other issues along with pork barreling come election time. This whole REX saga is a classic example of why the government needs to stay out of business. They should go broke and let it start again with whomever wants to fly to these towns.
The issue with the whole subsidy concept is for how long and how much do you subsidise something that is unaffordable? Why don’t we subsidise the Sydney housing market because that is unaffordable too? If people want to live in the regions that’s fine, it’s cheap, great quality of life etc etc but due to low volume airfares will be relatively expensive. That’s just reality.
I don’t think as many of Rex ‘routes’ are subsidised as might be suggested on this forum.
having said that - I do agree that the market can sort out the pieces after Rex collapse - another operator can pick up the subsidy.
Joined: Jul 2003
Posts: 3,381
Likes: 532
From: Somewhere
I agree it’s a very complex issue and it is exacerbated by CASA amongst other things. It needs to be easier to start aviation businesses and you don’t need QF level of bureaucracy and international airport regulations to run a country airline and aerodrome but CASA will make sure you have that.
Ironically country RPT competes with Train and Bus services which are also subsidised. If those modes of transport actually paid the full economic price of travel you will find that aviation might be more viable. There is also a lack of airports in major cities too which just makes it more expensive for country airlines to fly there.
So all things considered all you can do is limit competition and create a monopoly route that is regulated if you want to go down that path. Once you start throwing public money at it, it will just become a bottomless pit and every country town in Australia will be on the gravy train. Just look into the NDIS if you want to see what unrestrained government subsidy looks like. That was set up with ‘good intentions’ and ‘ we can afford it’ yet now look where it has gotten to.
Ironically country RPT competes with Train and Bus services which are also subsidised. If those modes of transport actually paid the full economic price of travel you will find that aviation might be more viable. There is also a lack of airports in major cities too which just makes it more expensive for country airlines to fly there.
So all things considered all you can do is limit competition and create a monopoly route that is regulated if you want to go down that path. Once you start throwing public money at it, it will just become a bottomless pit and every country town in Australia will be on the gravy train. Just look into the NDIS if you want to see what unrestrained government subsidy looks like. That was set up with ‘good intentions’ and ‘ we can afford it’ yet now look where it has gotten to.
Joined: Aug 2018
Posts: 98
Likes: 33
From: Not far away
So all things considered all you can do is limit competition and create a monopoly route that is regulated if you want to go down that path. Once you start throwing public money at it, it will just become a bottomless pit and every country town in Australia will be on the gravy train. Just look into the NDIS if you want to see what unrestrained government subsidy looks like. That was set up with ‘good intentions’ and ‘ we can afford it’ yet now look where it has gotten to.
Joined: Jul 2009
Posts: 569
Likes: 383
From: Australia
Well what is your solution for transport to and from the regions? There will be many with no air service if there are no subsidies, and I am assuming you wouldn't want government running their own airline (NBN style)?
You can't just say "tough ****, move to the city then if you can't afford it". You do realise the country's economy and prosperity doesn't just rely on the east coast?
We have a huge farming industry in regional/remote areas along with many others and the people who make it happen shouldn't just be stranded without reasonable means of transport to the outside world.
People in the regions also pay the same for their access to mobile networks as those in the cities but it costs Telstra (or Optus) a huge amount more to provide that service so even instances where there are no subsidies, city folk are subsidising those in regional/remote areas. Yes I also acknowledge that these days many remote Telstra & Optus sites have also been subsidised by the government, but once again it is for the greater good of the nation.
You can't just say "tough ****, move to the city then if you can't afford it". You do realise the country's economy and prosperity doesn't just rely on the east coast?
We have a huge farming industry in regional/remote areas along with many others and the people who make it happen shouldn't just be stranded without reasonable means of transport to the outside world.
People in the regions also pay the same for their access to mobile networks as those in the cities but it costs Telstra (or Optus) a huge amount more to provide that service so even instances where there are no subsidies, city folk are subsidising those in regional/remote areas. Yes I also acknowledge that these days many remote Telstra & Optus sites have also been subsidised by the government, but once again it is for the greater good of the nation.
Even in the United States, the bastion of free-market darwinian capitalism, they still have subsidies for air services to regional areas that otherwise would not be served by the 'market'.
It's in the Surface and Air Transportation Programs Extension Act 2011 and is called the Essential Air Service (EAS) Program.
Last edited by AerialPerspective; 9th January 2025 at 13:55.