Rex’s deputy chairman, John Sharp, has launched a withering attack on Qantas’ finances, branding the airline “technically insolvent”.
Sharp also suggested in the newspaper column that chief executive Alan Joyce was a hypocrite for going “cap in hand” to the federal government for help.
“Qantas is now so desperate that it is willing to risk universal ridicule just to get its hands on more cash at any cost,” he wrote.
The two businesses have for months been involved in a tit-for-tat argument over launching new services, which started with Rex accusing the flag carrier of using “predatory” tactics to compete with it on previously exclusive routes. Qantas responded by arguing that its smaller rival was throwing a “tantrum”.
Sharp on Wednesday used a column in the AFR to respond to a comment by Joyce that “when Qantas plays its best game, it always wins”.
He said Joyce had repeatedly tried to discredit his airline and cast doubts about its viability. “Rex’s patience has a limit,” he wrote. “It is now time to set the record straight.”
After criticising the airline’s performance over the last decade, he said that while Qantas likes to “brag” about its financial position, it’s actually “disturbingly similar” to Virgin’s before it went into administration.
“It could be argued that Qantas is now technically insolvent since its limited unencumbered cash would not be sufficient to meet all of its liabilities that have fallen due, especially the refundable tickets worth billions,” he wrote.
Finally, he accused Qantas of selling tickets for international flights despite not knowing whether borders would be open.
Qantas pushed back its plan to restart international flying from 1 July to 31 October following government criticism of the earlier date.
“It is now crystal clear that Qantas’ best game is played against its customers leaving hundreds of thousands of mums and dads billions of dollars out of pocket,” concluded Sharp.
The row between the two airlines began in February when Rex accused Qantas of uncompetitive behaviour by launching rival services on its previously exclusive routes, which it said caused it to discontinue five separate regional services. These have now been reinstated.
Outlining his case at a Senate committee, Sharp said the routes Qantas is moving to are too small for them to make a profit on.
“They’re doing it because they want to swamp us, to push us out of our traditional marketplace and to hurt us financially so that that in turn hurts us in our expansion into the domestic market,” he said.
However, the day after Sharp first made these comments, ACCC chairman Rod Sims backed Qantas at a separate hearing of the same Senate committee.
“Rex’s idea of competition is that it’s something that happens to other people, because they believe they have an enshrined right to be the only carrier on some regional routes,” Qantas said.
Sharp’s column was a follow-up to an earlier piece in which he said Qantas was secretly “distressed” at his airline’s plans to fly capital city routes despite publicly belittling its chances.
He compared the national carrier to the Titanic and said the real reason for Joyce’s strong comments were to make customers think Rex and Virgin could collapse.