Rex Airlines has been placed on a trading halt on the ASX due to rumors of internal strife and tension among directors, following a request from the airline itself.

The trading halt will remain in effect until an announcement is made or until Wednesday, unless the Australian Stock Exchange (ASX) decides otherwise.

This suspension comes after Rex requested the halt pending an announcement related to a report about hiring turnaround experts from Deloitte.

Leadership tension has escalated at Rex, with former executive chairman Lim Kim Hai ousted in June and currently seeking to remove the new chairman and other directors.

Lim Kim Hai, who held nearly 17% of Rex, has called for a shareholder meeting to remove four directors, including the current chairman John Sharp.

To address its difficulties, Rex has reportedly appointed Deloitte restructuring professionals Sal Algeri and Richard Hughes for assistance.

The airline has faced escalating costs, particularly for fuel, complicating profitability predictions and leading to a reported loss of $3.2 million for the first half of the 2023-24 financial year.

Rex Airlines has not recorded a profit since the Covid pandemic and faces concerns regarding its financial future, reminiscent of budget airline Bonza, which entered voluntary administration in April 2024.

Despite these challenges, Rex operates flights to 56 destinations and has recently introduced low-cost fares to compete with larger rivals like Qantas and Virgin.

The Transport Workers' Union has called for a commission to oversee the aviation industry, emphasizing the need for healthy competition amid the current crisis.

Prime Minister Anthony Albanese has underscored the importance of maintaining a viable aviation industry in Australia, as many communities depend on Rex for access to essential destinations.