Rex – Regional Express (ZL, Wagga Wagga) has entered into a trading halt on the Australian Stock Exchange (ASX) amid reports that it has called in Deloitte to restructure the business, after a foray into domestic jet operations continues to bleed cash.

Rex’s shares, which are at four-year lows, went into a trading halt before markets opened in Sydney on July 29. The suspension was at the airline’s request and followed a report in The Australian newspaper at the weekend that Sal Algeri and Richard Hughes, the team from Deloitte who helped with the Virgin Australia (VA, Brisbane International) administration, had been called in to help Rex dodge a similar fate. “Without a successful restructuring, Rex may not be able to avoid administration,” the usually well-informed outlet wrote.

Rex declined to comment to ch-aviation pending a further market announcement, expected on or before trading commences on July 31.

Formed out of the ornaments of commuter airlines caught up in the Ansett Australia liquidation, Rex had built a solid business over the decades operating Saab 340 types to remote and regional airports, primarily in Australia’s southeast. It also has subsidiary freight and aeromedical airlines, chases subsidised government contracts, and is increasingly active in the fly-out-fly-out space after buying a 50% stake in National Jet Express (JTE, Adelaide International).

However, a decision to launch B737-800 operations and take on Qantas (QF, Sydney Kingsford Smith) and Virgin Australia on highly competitive mainline routes has resulted in ongoing losses with Rex struggling to gain market share beyond single digits. Launched during the pandemic when Virgin Australia’s future was less certain, Rex was targeting up to a 37% domestic market share. Rex’s mainstay turboprop operations are also experiencing issues, including supply chain constraints and pilot shortages which have collectively resulted in route cancellations and frequency reductions. According to ch-aviation fleets data, twenty-three of Rex’s fifty-seven Saab 340s are on the ground.

More recently, there have been boardroom upheavals, with the chairman ousted amid governance issues that have sparked investigations by the Australian Securities and Investments Commission. As recently reported in ch-aviation, ex-chairman Lim Kim Hai, who owns 17% of Rex and held the chair’s role for two decades, has pushed back, requesting a shareholder meeting to dismiss four directors including current chairman John Sharp. Rex has yet to set a date for that meeting.

Another Australian airline, albeit a more shortlived one on a different business model, Bonza, went bust in late April.

ch-aviation has contacted Sharp for comment.