Hours after Rex went into administration,the watchdog told Treasurer Jim Chalmers it was probing the airline for deceiving investors about its profitability.
The move would make it the first Australian government to own an airline since Qantas was privatised in the 1990s.
New documents show former executive chairman Lim Kim Hai described the airline’s sales as “bewilderingly bad” less than two months after Rex said it expected to make a profit.
The federal government handed it an $80 million lifeline last month,but it should have imposed stricter conditions on Rex before handing over the money.
The corporate regulator warned Treasurer Jim Chalmers it was investigating Regional Express for misleading conduct before the Commonwealth bailed out the collapsed airline.
The government’s aviation white paper will review why more than 80 per cent of government bookings are made with one airline.
The new charter of rights for airline customers is just one of 56 proposed reforms that will govern the nation’s aviation sector for decades to come.
Transport Minister Catherine King has confirmed regional flights booked with Rex will be covered in a bid to keep the regional airline solvent.
A graveyard has filled with airline groups that have tried and failed to challenge the duopoly in the skies,from Compass to Tiger Airways and Bonza. Rex is just the latest.
EY partner Sam Freeman says he’s received a lot of early interest in Rex and is preparing to kick off the sales process as soon as next week.