REX cuts Bass Straight flights as former directors face court

By Andrew Curran.

Regional Express (REX) is scaling back its Bass Strait flights in response to low demand and rising fuel prices. The airline will axe its flights between Melbourne (MEL) and Devonport (DPO), and Burnie (BWT) and King Island (KNS).

REX currently operates Melbourne - Devonport and Burnie - King Island round-trips five times per week. The services will end on June 20, 2026.

REX’s other Bass Strait routes, Melbourne to Burnie and Melbourne to King Island, will continue.

“These changes have been driven by the volatility of a challenging operating environment,” the airline said in a statement.

Other airlines continue on affected routes

Both routes are already served by other carriers. QantasLink’s DHC-8-Q400s fly between Melbourne and Devonport three times daily, while Sharp Airlines operates Metroliners between Burnie and King Island.

The Tasmanian Government says it will continue working with airlines to ensure essential transport needs are met.

“We recognise the importance of these services for local residents, businesses, and visitors,” said Minister for Infrastructure and Transport Kerry Vincent.

“Any loss of air connectivity is felt strongly in regional areas, and we understand the concern this decision will create.”

REX is also reducing frequencies on another route from Melbourne. Its long-standing Melbourne–Mildura (MQL) service will reduce from 24 to 19 weekly round-trips from June 22. This route is also served by QantasLink.

REX flies to 53 airports around Australia using its fleet of Saab 340s. The airline was acquired by US-based Air T in 2025 after filing for bankruptcy the previous year.

Former REX directors face ASIC action

After 18 months in the headlines, Air T and REX CEO Neville Howell have largely kept the carrier out of the spotlight this year while quietly working to resolve several legacy operational issues

However, REX’s former directors have had less luck avoiding publicity. Last week, the Australian Securities and Investments Commission (ASIC) opened its case in the New South Wales Supreme Court against former executive chairman Lim Kim Hai, former deputy chairman John Sharp, and directors Lincoln Pan and Siddharth Khotkar.

ASIC alleges Regional Express Holdings Limited engaged in misleading and deceptive conduct and that the four directors disregarded their disclosure obligations.

All four directors initially denied the allegations. However, by mid-week, Lim Kim Hai raised the white flag and admitted to failing to disclose the company’s dire financial situation in early 2023.

REX was losing money heavily in early 2023, and ASIC alleges the directors were well aware of this. ASIC further alleges that Lim Kim Hai signed off on a regulatory filing in February 2023 stating he was “optimistic the group will have positive operating profits” for the 2023 financial year.

ASIC says this filing was “unreasonable and unsupportable”. The airline went on to record an AUD35 million (USD25 million) loss that financial year. Regional Express filed for bankruptcy in July 2024.

“Former Rex executive chair Lim Kim Hai admitted, in the Supreme Court of New South Wales, to all alleged contraventions against him,” an ASIC statement issued late last week said.

Sharp, Pan, and Khotkar continue to defend the allegations against them.

Lim now faces pecuniary penalties and potential disqualification orders.

LKH still controls National Jet Express

Singapore-based Lim, known widely as LKH, still retains an interest in Australian aviation. He owns 55% of National Jet Express, with the remaining 45% owned by Tjoa Thian Song, Lim’s brother-in-law.

National Jet Express operates a fleet of 24 cargo and passenger aircraft around Australia and is active in the fly-in fly-out, ad hoc charter, and overnight freight express markets.

In 2022, REX and interests associated with Lim partnered to buy National Jet Express from Cobham Aviation. Lim later acquired REX’s stake during the fire sale following the airline’s bankruptcy.

Any penalties imposed are unlikely to affect Lim’s current investment in National Jet Express but could result in bans preventing him from serving as a director of Australian companies.

ASIC company records show Lim Kim Hai is currently a director of National Jet Express Pty Ltd.

Lim may also face hurdles regarding future large investments in Australian entities. Any future investments may require approval from Australia’s Foreign Investment Review Board, which may give thought to whether Lim remains a fit and proper person following his admissions last week.

Photo: AI-Generated.

Contact the writer: andrew@aerosouthpacific.com