Rex brass promised profit before plunging to $35m loss

May 18, 2026 - 11:13

Australia's corporate watchdog has launched legal action against former board members of Rex Airlines, accusing them of misleading investors about the company's financial health. The Australian Securities and Investments Commission alleges that Rex's brass publicly promised the airline was on track to turn a profit, only for it to crash into a $35 million loss shortly after.

According to court documents, the regulator claims that between August 2022 and February 2023, the regional carrier's directors made statements that painted an overly rosy picture. They reportedly told the market that Rex was heading toward its first profit in years, citing strong demand and cost controls. But behind the scenes, the airline was bleeding cash, with mounting debts and operational struggles that the board allegedly failed to disclose.

The case centers on whether those profit forecasts were reasonable at the time they were made. ASIC argues they were not, and that investors were left holding the bag when the true numbers came out. The loss of $35 million was a stark reversal from the upbeat messaging, and shareholders saw the value of their stakes evaporate.

Rex, which operates flights to regional towns and competes with Qantas on some major routes, has been under financial pressure for years. The legal action now puts a spotlight on how much the board knew and when they knew it. Former directors are expected to fight the allegations, but the case raises tough questions about accountability in the boardroom. A hearing is set for later this year.