Rex has rejected claims by Qantas chief executive Alan Joyce that it used government handouts to expand its network.
The business said on Friday that Joyce was “misinformed by his advisers” and argued it was impossible to use the COVID-19 payments for improper means because they are “strictly audited” by Ernst & Young.
The row began when the regional carrier this week announced a full-year underlying profit before tax of $250,000 and an increase in revenue.
It marked a remarkable turnaround from March, when Rex warned it would have no choice but to announce the “shutting down of its network” if it didn’t receive financial aid from the government, even threatening to stop transporting COVID-19 testing samples.
Then, in May, after it received its effective bailout, the business announced ambitious plans to take on Qantas and Virgin by expanding its network to service Australian capital city routes.
Joyce said on Wednesday the airline “should not be using government subsidies to fund growth”.
“That doesn’t feel right,” said Joyce. “That doesn’t seem right.”
In a statement of response, the regional airline said, “Rex has publicly stated several times that its proposed domestic jet operations will proceed only with new funds being made available by external parties.
“These funds will be ringfenced solely for the new domestic services. Rex is yet to complete negotiations to secure funding.”
Rex then accused Qantas of misusing Commonwealth grant money itself to fund its “predatory” new route between Sydney and Orange, in the latest salvo between the two airlines over the route.
“Given this heavily loss-making initiative, one cannot but conclude that some managers in Qantas thought it fit to conduct a predatory strike to destabilise Rex at the expense of the taxpayers,” Rex added on the issue. “What is even more tragic is that the more additional losses Qantas incurs, the more staff it will have to retrench on top of the 8,500 already announced.”
Qantas previously responded to Rex’s complaints over the route by saying the airline was “clearly uncomfortable about facing competition and seeing their monopoly on flights to Orange coming to end”.