ASIC Says Rex’s Profit Optimism Was “Unreasonable” as Airline’s Past Troubles Resurface

Australia’s corporate watchdog has criticised regional carrier Rex for what it called “unreasonable” optimism about returning to profit, noting the airline had just five months to reverse significant losses during what is traditionally the weakest half of the year for domestic aviation.

According to ASIC, Rex’s public confidence in a turnaround did not align with industry realities, especially given the seasonal downturn that typically hits airlines in the latter part of the financial year. The regulator has scrutinised Rex before: in 2021, the airline was fined $66,000 for breaching disclosure obligations related to its expansion from regional routes into domestic services a move that ultimately contributed to its collapse into administration.

The airline’s financial troubles deepened until October, when US aviation group Air T acquired Rex through administrators EY. The rescue came after the federal government stepped in, purchasing $50 million of Rex’s debt from a major creditor and extending loans of up to $80 million to keep essential regional routes operating.

Rex remains Australia’s largest independent regional airline, flying to 53 destinations nationwide. But ASIC’s latest findings highlight the scale of the challenge the carrier faced and the risks of overstating recovery prospects in a volatile aviation market.