Just hours into the start of a new work week, it was all hands on deck inside Rex’s unassuming head office in the heart of Sydney.

On Monday, the publicly listed regional carrier had entered a trading halt of the Australian Securities Exchange (ASX), pledging to deliver an update about the company by Wednesday.

Less than 24 hour later, in the absence of any information from the airline, speculation was rife that it was a matter of when — not if — the company would be entering voluntary administration.

Behind the scenes, emergency talks between consulting firm EY and executives from Rex were underway, as both sides tried to find a solution to stop the embattled carrier from financially bleeding out.

The source of the problem was clear: its capital city airline operation was costing $1 million a week to remain in the air. Now it was just a matter of cauterising the wound.

Outside of Mascot, Rex’s 2,000-strong workforce endured a vastly different Tuesday.

Throughout the day, some employees were being turned away from hotels, while others were unable to book rides with the company’s Uber account.

But there was no communication from the company at all, minus a quiet directive to suspend all flight bookings for inter-city routes on board Boeing 737s online.

It was only through media reports that many of these workers would later learn their fate.

Long meetings attended by all of Rex’s top brass extended well into the evening, and by 9:30pm on Tuesday the inevitable decision was made.

The company was placed into voluntary administration, and journalists received late night phone calls, text messages and emails minutes later alerting them to a statement quietly shared on its website.

As the news was splashed across front pages, the first communication Rex staff received from their employer arrived in the form of a text message sent just before 11:30pm.

By that time, they already knew their company had gone under. If they hadn’t read the media reports, a Facebook post from Virgin Australia did the trick.

With an all-in staff meeting scheduled for 8am on Wednesday, it was an anxious night for workers who didn’t know if they still had a job to go to at all.

How did Rex become Australia’s latest aviation casualty?

Only three months ago, Australia’s highly concentrated airline industry claimed another victim, with regional carrier Bonza collapsing in spectacular fashion — just 15 months after it launched.

It’s too early to say whether the early warning signs presented by the collapse of that airline were missed, but it appears as if the seeds of Rex’s downfall were sown long before its competitor ran into trouble.

The first public inkling of Rex’s troubles emerged last week in a piece published in The Australian’s Margin Call column suggesting the airline had called in a turnaround team from consultants Deloitte.

But privately, the airline had been experiencing internal strife for months, which culminated in a boardroom drama in June.

The executive chair and the company’s biggest shareholder Lim Kim Hai was suddenly replaced by former Howard government minister and deputy chair, John Sharp.

After retiring from the House of Representatives in 1998, Mr Sharp spent decades working in the aviation space, including through his own consulting company before joining the Rex board.

In response to the internal shake-up, Mr Lim requested the removal of four directors — including Mr Sharp — from the board, as well as the addition of two new positions.

As that drama was playing out, a slight tweak was made to Rex chief executive Neville Howell’s employment contract.

Just a week before Rex announced a trading halt, it issued a statement to the ASX with a new set of conditions entitling Mr Howell to 12 months’ notice for his termination period.

Perhaps more importantly, the new provisions allowed that in the event there was a “significant change to his duties or responsibilities, or a change which substantially diminishes his position, the company will immediately terminate his employment and make payment in lieu of 12 months notice”.

As more information comes to light now the company has called in administrators, it appears a financial gamble during the pandemic to expand into capital city flights would ultimately send the business into a nosedive.

Losing $1 million a week

Rex, also known as Regional Express, was formed in 2002 shortly after the collapse of Ansett.

Two passenger airlines, Hazelton and Kendell, which had been operating as separate businesses under the failed airline merged to eventually become Australia’s biggest regional carrier.

At the core of the carrier’s business was the desire to connect regional towns with capital cities, using 34-seater Saab 340 turboprop aircraft to get passengers from A to B.