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Questions continue over Rex’s future as Deloitte reportedly says it will not seek to be appointed as an administrator.
Lawyers for the big four accounting firm, which The Australian reported over the weekend had been called in to examine the airline’s finances, said in a letter seen by The Australian Financial Review that Deloitte would not accept any potential appointment as voluntary administrator.
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“Our clients are not seeking to be appointed voluntary administrators of REX … nor will they consent to such an appointment. Any suggestion that our clients are seeking to be appointed as voluntary administrators is therefore false,” the letter read.
Rex entered a trading halt on Monday amid speculation about its finances, with The Australian reporting that its domestic jet operations were struggling.
The news comes weeks after former executive chairman Lim Kim Hai launched an audacious bid to overthrow the airline’s board following the ascension of John Sharp as chairman and Neville Howell as the new Rex CEO.
In a statement to the ASX, Rex said Lim is seeking to remove four directors, including Sharp, and appoint two new ones in his capacity as a shareholder with a more than 5 per cent stake in the airline group.
Lim told The Australian Financial Review that he speculated private equity firm PAG had its own “personal agenda” in his removal.
“I won’t speak ill of the dead or the dying. Suffice to say that I think [my reinstatement] will be in the best interest of the company,” he said.
The TWU has labelled Rex “another victim of an unregulated aviation market”, with national secretary Michael Kaine likening the situation to the collapse of Bonza and the administration of Virgin Australia, and pointing the finger at Qantas over “capacity dumping, slot hoarding and a bidding war in regional Australia”.
“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,” he said.
“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.”
Rex’s trading halt could last until Wednesday pending a material announcement from the airline.
