Airline’s future up in the air as shares frozen

[Pelican Press 0]

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Airline’s future up in the air as shares frozen

Concerns are mounting for the future of regional airline Rex after the company placed its shares in a trading halt amid boardroom turbulence and multimillion dollar losses.

The airline’s shares were placed in a trading halt on the *********** sharemarket at the request of the company on Monday, pending an announcement.

Shares remain halted until that announcement comes, or until Wednesday, unless the ASX decides otherwise.

“In the meantime it isn’t appropriate for us to make any further comments,” a Rex spokesperson told AAP.

The trading halt came after a column in The *********** newspaper about a “turnaround team” from consultancy firm Deloitte being called in to go over the airline’s books.

Deloitte referred inquiries to Rex.

Prime Minister Anthony Albanese said an airline running into trouble was a weekly occurrence in the tough, global industry.

“One thing we need to do is to make sure that we have a viable and ongoing *********** aviation industry,” he told ABC News.

A range of communities around the nation rely on the carrier.

“Rex is the only airline to go to some of those destinations, so it’s important,” Mr Albanese said.

The prime minister met with Transport Minister Catherine King on Monday and further information had been sought from the airline, he said.

A spokeswoman for the minister told AAP regional aviation is critical to connecting communities.

“The minister has asked her department to provide briefings as information becomes available, and expects Rex to continue to provide timely public updates,” the spokeswoman said.

Opposition transport spokeswoman Bridget McKenzie accused the minister of dithering over reforms to aviation, perpetuating a lack of competition in the sector.

“It is time this government pulled its head out of the sand and starts pulling on the levers to foster more competition, better reliability and more affordable airfares in Australia,” she said in a statement.

“Two aviation companies control more than 93 per cent of the domestic space and companies like Rex create more competition which means cheaper airfares across the board.”

The Transport Workers’ Union said the trading halt illustrated the need for a commission to oversee aviation.

“We know healthy competition is the only remedy for an industry in crisis,” the union’s national secretary Michael Kaine said.

Rex reported a loss of $3.2 million for the first half of the 2023-24 financial year in February, compared with a $16.5 million loss in the prior *******, saying escalating costs, particularly for fuel, made it hard to predict full-year profitability.

The company announced long-serving executive chairman Lim Kim Hai would leave that role after 21 years in June.

He then requested a meeting as a significant shareholder to call for the removal of several other directors in July.

Chief executive Neville Howell’s employment agreement was varied on Thursday to align its terms with “industry practice” following his promotion in June.

The variation increased the former chief operating officer’s termination ******* to 12 months, from five weeks, and specified he would be paid in lieu of that notice ******* if his role had a “significant change”.

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