iscover
Rex had planned to sell off its domestic jet operations to Virgin before its collapse, according to chairman John Sharp.
Speaking to ABC’s Four Corners, Sharp, who took over as chairman after the ousting of former executive chairman Lim Kim Hai, said the board had worked out a “rescue package” for the airline’s beleaguered domestic arm that involved offloading it in its entirety to its larger rival.
This content is available exclusively to Australian Aviation members.
A monthly membership is only $5.99 or save with our annual plans.
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
Virgin would have taken over Rex’s 737-800 fleet along with the associated staff and forward bookings, with Sharp saying it would have prevented the administration and saved around 600 jobs; however, according to the ABC’s reporting, he has since blamed Lim for the deal falling through.
“We had got to a point where that was pretty much done, and then it got torpedoed,” he told Four Corners.
Lim confirmed to the ABC he had been involved with the discussions, saying he had told the heads of Virgin and its parent company, US-based investment firm Bain Capital, that he needed to be part of the talks. Virgin and Bain did not comment on the ABC’s story.
“I said that if I’m involved then that’s fine. If I’m not involved, then you need to know that you run the risk that the shareholders may not approve it,” he said.
Virgin moved quickly to take over the leases of three Rex 737-800s after the smaller carrier entered administration, a turnaround from Rex’s domestic launch with several former Virgin planes following Virgin’s administration in 2020.
Virgin also pledged to re-accommodate Rex domestic passengers free of charge on its planes, later saying it had rebooked around 127,000 flights for Rex customers.
Sharp has pointed the finger at Lim for the airline’s collapse, saying Rex’s domestic flights were poorly marketed and Lim had failed to adapt to competition from a “ruthless” Qantas; he also cited legal threats over the alleged theft by Rex of four Saabs from an Arizona boneyard in 2020 as a reason the former executive chairman was pushed out.
“The buck has to stop somewhere and it obviously has to stop at the top. [Lim] was at the top,” he said.
“When it came to a point where we realised there was a problem, the board stood up and said, ‘Well, we have to fix this’.”
Lim has defended his record, telling the ABC that while he had “made some bad decisions”, the “batting average was not too bad” before the pandemic.
“The reason why I managed to be successful is because some of these so-called unhinged decisions are decisions that most people wouldn’t make,” he said.
“Rex had an impeccable record, both in terms of its operations and in terms of its financial capability. So obviously I did something right for over 20 years.”
Lim mounted a bid to overthrow the Rex board following his ouster, which has seemingly been put on hold after the administration.
