If nearly half the Saab fleet being grounded without engines and not enough crew is not too bad, then sure, they’re going ‘not too bad’.

AFR have spoken to LKH. The last paragraph is highly amusing yet typical and not surprising.

They couldn’t lie in bed.

Wow, it's almost like LKH has had no self reflection. At all. What a surprise.

Depends how bad the overall finances actually are. Maybe it’s beyond the point of saving now. A few semi profitable routes won’t save the farm if the piggy bank is already empty

This is exactly where all this is going.

But if they somehow convince the government to prop up the 737 operation….

It will require a lot of cash, hard to see any bailout at all, but I think we all know Albo will somewhat open the purse when it comes to regional connectivity.

But what are we funding? The Saab operation 5 years ago was profitable and all working. So we the tax payer are essentially just funding LKHs shortcomings since then? I would much prefer people like him are drained down to the last cent, before tapping the public purse.

BIG LOSSES: REX IN TRADING HALT AFTER LOSING ALMOST $1M A WEEK
Robyn IronsideRex is on the brink of financial collapse after losing close to $1m a week on its ambitious expansion into major city routes, with its *potential demise set to decimate regional transport links across Australia.

Anthony Albanese on Monday sought information about Rex’s crisis – first revealed by The Australian’s Margin Call column – from Transport Minister Catherine King because the airline was “important”.

Rex is the largest regional airline in Australia, servicing dozens of routes across NSW, Queensland, Victoria, South Australia and Western Australia with 2000 staff across its operations.

The Prime Minister said he would always stand up for Australian airlines and “it was important we do that”. He told ABC radio: “One of the discount airlines here (Bonza) has gone under in recent times, but Rex is an important airline. Rex is particularly important for regional communities and there are a range of communities where Rex is the only airline serving some of those destinations.”

He added that Rex had come through the Covid pandemic and received “substantial government support”, but his government would remain vigilant. “We will continue to work with them because we want to see not just those jobs maintained, but we also want to see those communities continue to have access to aviation,” Mr Albanese said.

A spokeswoman for Ms King said she had asked her department to provide briefings as more information became available, and she expected Rex “to provide timely public updates”.

The dire situation has prompted a trading halt for Rex shares, as directors await a report from EY Australia, which was brought in to examine the airline’s financial *affairs. The report is expected to provide restructuring advice to the airline, which could spell the end of the 737 operations launched in March 2021.

There was also a possibility EY could recommend the appointment of administrators.

The airline’s half-year results published in February showed Rex’s regular public transport services were bleeding cash, with a loss of $25m for the six months to December 31 – or almost $1m a week. The pilot training academy also lost $2m and the recently *acquired National Jet Express shed $1.5m, leaving only charter operations in the black with an $8m profit.

Given the January to June period is typically a tougher period for airlines, it is unlikely Rex has been able to turn around its losses on the 737s operations at the same time as leasing costs and airport charges *increased.

Fierce competition from *Virgin Australia, Jetstar and Qantas also made life tough for Rex, which was attempting to steal market share from the airlines on lucrative routes such as Melbourne-Sydney, Brisbane-Sydney and Melbourne-Brisbane.

Rex’s recent expansion into east-west routes, with the launch of Melbourne-Perth, sparked a ferocious price war with Virgin Australia, which quickly undercut Rex’s fare of $99.

Adding to growing tension was an investigation of Rex by the Australian Securities & Investments Commission over at least two corporate governance issues.

The investigations by ASIC are understood to have triggered a boardroom mutiny against longtime executive chairman and major shareholder Lim Kim Hai.

Rex informed the ASX in June that Mr Lim had been replaced by deputy chairman John Sharp, and chief operating officer *Neville Howell had been appointed CEO.

It soon became clear Mr Lim was not happy with the arrangements. He called a meeting of shareholders to vote on resolutions, including the removal of Mr Sharp and three other directors – Lee Thian Soo, Ron Bartsch and Jim Davis. A date for the meeting is yet to be set.

Last week the terms of Mr Howell’s contract as CEO were updated to ensure he would be entitled to 12 months’ pay in the event of his position being terminated. The changes were authorised by Mr Sharp.

The boardroom upheaval came after years of stability at Rex, which was formed in 2002 in the wake of the Ansett collapse, following the merger of regional carriers Hazelton and Kendell.

Most of the senior management team have been with Rex for more than 12 years, and several since the airline’s inception.

The investigations by ASIC are believed to concern two corporate governance issues, including a week-long delay in informing the market of a downgrade in profit guidance for the 2023 financial year.

The second investigation related to a failure to disclose the relationship between Mr Lim and his brother-in-law, Thian Song Tjoa, during the 2022 acquisition of National Jet Express. Between them, Mr Lim and Mr Tjoa held 50 per cent of shares in NJE.

Opposition transport spokeswoman Bridget McKenzie said the Albanese government must not allow Rex to go the same way as budget carrier Bonza, which failed in late April leaving thousands of customers and hundreds of staff in the lurch. “A competitive aviation industry is crucial for the Australian economy and the travelling *public, but true to form in its approach to aviation, Labor sat on its hands as Bonza entered administration,” Senator McKenzie said. “Now is the test for Anthony Albanese.”

In recent weeks, shares in Rex have sunk to lows not seen since the pandemic struck in early 2020. Shares last traded at 56c.

Rex employs about 2000 *people across its operations, based in Sydney, including many within the 737 service.

Despite trumpeting the arrival of a 10th 737 late last year, only nine remain in service after one was returned to the lessor.

A third of Rex’s Saab 340 fleet was also out of action due to a shortage of parts, pilots and *engineers

So according to LKH, PAG initiated the palace coup. Wow! That's interesting.

LKH is right about one thing in that AFR interview; PAG will not convert their notes to stock. There is no way that anyone in their right mind would convert a $150 million loan at 4 percent (that's $500k a month income), with first ranked secured debt status, into a tranche of one hundred million shares worth well, that's anyone's guess; $56 million as of last week.

It will be a bad move by any government to keep propping up airlines. It’s the old profits go private debt goes public scenario. Why should tax payers who by a large majority live in urban areas prop up a foreign owned ASX listed regional airline? Not to mention all the moral hazard generated by such a move. There’s also the issue of picking winners. Why is REX any more important than Bonza, Virgin or Ansett?

At least in NSW, there's nowhere Rex fly that isn't served by the regional rail & coach network, so there is a (slower) alternative if they do go belly-up. SA seems to be covered by a couple of bus operators and Queensland look to have Greyhound servicing their towns so it's not as if these communities will be left isolated - their residents might need to plan longer travel times is all.

Shame the media don’t report this correctly tho. They keep saying “Australian airline” and blaming QF,VA and JQ for their demise. You rarely hear the blame shifted on to the actual ppl that run the joint. You would think JS should cop some heat now but there is nothing.

ABC hints to it, but I'm sure they're scared of defamation. On previous writeups they talk about his involvement in selling off all the airports and the irony that JS complains about slots.

Politicians are using the whole monopoly thing to feather their own political nests. The opposition are using this as a tool to nail down on the Transport minister, she is an easy target going off past events, don’t get me wrong, she is as useless as ever. The parties gain public sympathy by the whole ‘little guy’ being belted by the ‘big boys’. That resonates well with the public as they are currently being taken for ride by the likes of monopoly players ie Woolworths, Coles, Banks.

Kaine is probably the worst and needs to start having a crack at these incompetent morons that run these local airlines into the ground, not blaming Vanessa and Jayne everyday.

I agree that the market has issues when it comes to Power. Sydney slots, yes, an issue. But Rex has Sydney slots. They don’t need any more, they can’t even fill what they have. Rex has been given taxpayer funded simulators, hangers, wage subsidies, the Perrottet government had been very kind to the Rex Balance Sheet.

They have been given every opportunity to make this work, more compared to most. But they have failed due to the typical way Rex does things.

Let’s see if any journalists can see the light here. Start asking the hard questions to LKH and JS.

the Saab op was not funding the jet operation, it was a $150m cash call that did that and the cookie jar is looking like a hour glass. Remember VA tried to stay alive on loans and cash injections until their hour glass ran out of sand. A number in the industry tell me they are being late paid or put on payment plans which is again lack of cash ie revenue. One day the lemon is very dry..,,

From the moment the work experience kid at Rex scribbled together the master plan to shake up the domestic aviation sector here in Australia it was already being called for the bullsh!t pie in the sky fantasy it was.

Rex has totally turned its back on Regional Australia, its staff and shareholders and now while half its fleet of Saabs sit rotting in fields around Australia of course it’s not the inept and ego driven management who are to blame and as a result taxpayers will be paying for their incompetence.

People in the country have long had enough of the lack of service, cutting back of routes and increased airfares and I don’t think it would be a great loss to them if they ceased operations.

It’s a great shame that unqualified and incompetent management have driven Rex burning into the ground.

I can assure you that there’s no Greyhound bus service to places like Windorah, Birdsville, Bedourie, Boulia, Doomadgee, Burketown, Mornington Island, Normanton. I don’t know which of their Cape destinations have other carriers on them.

Could be just the reason Skytrans need for another resurgence!

It will be interesting to know who actually called in Deloittes. Reading the Kim Hai article I have a feeling its not the Rex board but either PAG or one of the banks. However you can bet it was Deloittes that leaked it for their own self serving reasons.

​​​​​​​Can you get an A319 or 320 into Doomadgee?

I guess the ideal solution to that is that any government handouts/bailouts come in exchange for said government also owning a stake in the airline. It wouldn't be a particularly bad idea considering it is essentially a monopoly to many of it;s destinations, which can't support two competitors.

Apparently, it's not Deloitte, rather it is EY who were called in.