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Former Rex executive chairman Lim Kim Hai is looking to slash costs at FIFO airline National Jet Express (NJE) amid the US-China trade war.
In a newsletter to NJE staff seen by The Australian, Lim, who bought the controlling share in the airline previously held by Rex before its collapse, said NJE would need to prepare for a decline in China’s need for resources “due to sluggish exports and a decline in domestic consumption”.
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According to Lim, who owns 55 per cent of the company, this could lead to “shutdowns across parts of Australia’s mining industry” and would necessitate cost-cutting measures that “reach all levels of the company”.
“We need to brace ourselves for the worst and be prepared to fight the battle of our life that could determine the survival or otherwise of NJE,” he wrote.
“To do that, we must all get out of the business-as-usual mindset, especially the one inherited from the Cobham days when the response to all challenges was to throw money at it. Starting immediately, we will embark on a series of measures to improve productivity and efficiency.”
The company will set out to “reduce wastage in photocopying” and re-examine or replace some significant supplier contracts, including with US-based Sabre, which provides check-in services.
“Of course, nothing comes easy and these changes would involve some effort, some sacrifice and some extra-mile from the staff,” Lim said.
“Sadly, we have seen pushbacks from a small number of staff. I am giving fair warning I will make it my personal mission to hold them accountable for their actions wherever they are in the hierarchy.”
Lim, as well as fellow former Rex directors John Sharp, Lincoln Pan and Siddharth Khotkar, are currently facing legal action from ASIC, which has alleged “misleading and deceptive conduct” over a 2023 ASX statement saying the airline was “optimistic” about a full-year profit.
According to ASIC, Rex had seen operating losses in the year to date before issuing that statement and had not prepared a financial forecast for FY23 beforehand. The airline later forecasted a $35 million loss for that financial year and ultimately posted a loss of $31.7 million.
ASIC is seeking a declaration of contravention against Rex, but no financial penalties for the company; however, the watchdog is seeking financial penalties, as well as declarations and disqualification orders, against the four directors.
NJE has so far added two new aircraft to its fleet this year for Queensland and WA operations.
Justin Bannon
says:I am 100% Dumbfounded that Lim Kim Hai is allowed to operate another business when his previous airline is currently being operated via taxpayer funds. I’m sorry to all those affected by REX Airlines going into administration, but he should be banned from operating any business in Australia until the taxpayer funds are returned!