Rex lets go of hundreds of staff as it emerges Ernst & Young were called in months ago

Sydney, Australia - January 17, 2019: Regional Express SAAB 340B  taxiing at Sydney Kingsford Smith Airport runway. Registration VH-KDV

Hundreds of Rex employees have reportedly been axed just 48 hours after the airline went into administration.

On Wednesday, employees were informed that 610 jobs were at risk including 360 from its capital city operations and 250 from its regional business.  Now the ABC has reported that hundreds have been officially let go.

One devastated air hostess took to Facebook to share the sad reality of the situation after she lost her job. In response to a post from a Rex customer complaining her flight had been cancelled Layla Rackley said: “I know this is so frustrating but the Rex staff, including myself, have lost our jobs very unexpectedly and we are all heartbroken.”

The news comes as it emerges that the Rex CEO Neville Howell had his employment terms adjusted just days before the airline went into administration.

Howell is entitled to a 12-month salary payout of $352,600 if the budget airline ‘terminates his employment’ or ‘there is a significant change’ to the nature of his role.

Rex CEO entitled to $352,600 pay-out after his employment terms were updated just days before trading halt

The update to Howell’s employment terms were listed on the ASX on 25 July, just four days before the airline announced a surprise trading halt.

Before the 25 July change, Howell’s employment terms stated that he would be entitled to just 5 weeks’ notice period if the airline terminated his employment.

Staff were told on Wednesday by Ernst & Young that Rex was not viable and it could be weeks or months before they are paid their wages or redundancy packages.

Employees started receiving their termination notices on Wednesday night. It is understood that its capital city employees received the notice on Wednesday.

It has also been revealed that Ernst & Young were actually called in by Rex in May to conduct a strategic review of its operations.

The airline’s major lender private equity firm PAG allegedly asked the airline to bring in consultants to assess Rex’s “strategic options”. They were reportedly paid at least $500,00 upfront for the review and advice.

Earlier this week, The Australian Travel Industry Association called on the Federal Government to support the airline. The government is yet to respond.

ATIA calls on a Federal Government support package amid Rex collapse

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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