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Rex’s Sharp says ‘desperate’ Qantas is ‘technically insolvent’

written by Adam Thorn | April 21, 2021
John Sharp welcomes the inaugural Adelaide-Melbourne flight. From left to right: Mark Young, managing
director Adelaide Airport; John Sharp, deputy chairman, Rex; and Rodney Harrex, chief
executive, South Australian Tourism Commission.

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.

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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.

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“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.

Despite the argument, the flag carrier ploughed on and formally launched flights on some of the disputed routes, and Rex itself continued with its own plan to launch capital city routes.

“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.

Rex’s expansion into Canberra follows it launching new routes to the Gold Coast and Adelaide as well as Sydney and Melbourne.

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.

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23 Comments

  • Vannus

    says:

    Oh dear! Sharp just can’t help himself in denigrating QANTAS to the nth degree.
    Let’s see how he spruiks once the Fed Govt funds stop flowing to Rex, come 31-10-2021.

    He’s all mouth, when it comes to his main competitor, but not so much about his own carrier.

    When’s he going to tell WHY his airline’s NOT flying to/fro BNE?
    He hasn’t the b#@$ to do so, as it’d be very embarrassing for him to have to admit he can’t complete the so-called ‘golden triangle’ routes’.
    The reason was there, even in May 2020, when he ‘announced’ his inroads to the main trunk cities’.

    He’s a load of hot air, signifying nothing.

  • Martyn

    says:

    Sharp’s only ‘pointing the finger’ at QANTAS, so that his Rex Airline is not looked at too closely, by all & sundry.

    Funny how he’s not mentioned his flying on the main trunk routes, & their situation.
    Doubt loads would be high. Heard one flight SYMEL had 11 occupants’, & another only 30% filled.

    To keep ‘harping on’ about QANTAS is just the pits. No ‘honour’ at all in doing that, continuously.

  • Iain

    says:

    John Sharp you’re the hypocrite, you obtain $200 M from your mates in the federal government for nothing!!
    If Rex hadn’t received that money, you would no longer be flying at all. It’s all good for Rex to try to muscle their way into certain routes, however when Qantas do it to you, you cry foul.
    What’s good for the goose is good for the gander, you were spruking 9 return flights a day between Mel and Syd, strange you’re only doing 2 return flights a day, what happened?

    • Warwick

      says:

      Yes, Iain, his SYDMELSYD flights’ have had very poor load factors’ since commencement.
      So he’s only scheduling enough flights, so they ‘fill up’.

      He wanted to push into QANTAS’ main income, & now’s realising it’s not that lucrative for him.

      My money’s on his dropping these flights’, as well as other non-profitable ones’, by end of this year.
      He’s done this in recent times’, too.

      His mate McCormack, won’t save Rex if it goes ‘belly up’.

  • Dave

    says:

    Sharp just get on with running Rex and shut up. If you invested all your time in promoting your airline than trashing QANTAS more people might look towards flying with you. Remember the school yards play nice with others and you might be surprised that the big guys will protect you.

  • Ken

    says:

    Mr Sharp just not “get it” He needs to put all his efforts into Rex and not continually harp on about what Qantas is doing or not doing. I recall that earlier he made requests to the government for assistance to help Rex to remain afloat, but magically Rex then joined the big boys on the main trunk routes Brisbane – Sydney – Melbourne. well if you want to join the big boys then stop this harping and “get on with it”. Does he expect Qantas-Virgin-Jetstar to give away their traditional routes to the new interloper. Me think NOT.

  • Grant

    says:

    What laugh tailgate John is. I think we all know who’s desperate! #shutupjohn

  • Nicholas

    says:

    I don’t know what Sharp is drinking but seriously, he needs to stop whatever it is.

    Its a terrible look not only for him but for REX, I’d be a bit worried about them as the talk on the main trunk routes seems to be very different to the reality…

  • Clifton

    says:

    Sharp’s got a short memory.

    His mate McCormack gave Rex more funds than what QANTAS got, prorated.
    It’s time Sharp stopped with the criticism of QANTAS, as it makes him a huge whinger.
    He’s doing this to deflect folk looking at his own airline Rex.
    He may have to eat his words once Fed Govt monies’ stop end of this October.

  • Steve N

    says:

    Maybe Rex’s John Sharp is counting on any publicity is good publicity.
    But, if the diatribe keeps going after saying your piece, most pundits lose interest & possibly even feel disdain for them.

  • James Smith

    says:

    Vannus, this is a quote from Executive Traveller on 15 March, 2021 as to why REX hadn’t commenced services to Brisbane:

    In terms of new destinations, Rex has already indicated its interest in both Brisbane and Canberra.
    “It just depends very much on Brisbane Airport as to whether they want to get on with the job or whether they want to continue to work at the pace they’re working at,” Rex Deputy Chairman John Sharp told Executive Traveller earlier this month, hinting at some reasons why the Queensland capital was sidelined for the Gold Coast.
    “Brisbane could be more proactive in working with us to get things on the way.”

    It looks as though negotiations with Brisbane airport are at a stalemate.

    • Grant

      says:

      The only reason why there’d be a stalemate is because Rex expect everyone else to pay for the running of their airline. They’re practically a tax payer funded airline! Won’t be flying with them

    • Vannus

      says:

      Thanks James for that, but that’s just ‘waffle’ from Sharp.
      The REAL reason he’s not flying to BNE still needs to be said by him.

  • Marum

    says:

    Sharp sounds like the way I play chess. Attack is my best means of defence.
    Maybe that is why I not all that good either.

    Meowwwrrrr….Marum.(Die schachspielen Katze)

  • Copernican

    says:

    Sharp is wrong. Australia can’t afford for Qantas to go bankrupt – essentially it has a bottomless line of credit from the federal government, so cannot go broke. If things got really dire the would just get a loan, issue more equity, or get an emergency grant. Rex, on the other hand, only has value as nominal competition, and a little minnow servicing the routes beneath Qantas’s attention. Unfortunately for Rex, Qantas is now fishing in some very small ponds.

    • Vannus

      says:

      Yes, Copernican, you are so right in all you say.

      Loudmouth Sharp forgets that QANTAS is our National Carrier, & as such, is required to fulfil a role of being available to our ADF at anytime its’ directed to do so by our Fed Govt, or Chief of Defence Forces.

      QANTAS also has an absolutely huge role in Humanitarian relief, eg flying medical staff, & all their equipment, to natural disasters’ here, & to our surrounding Nations’.
      Think bushfires’, tsunami, earthquake affected places, over the years’.
      The Company also flew our wonderful cave rescuers’, AFP & Defence personnel, & their equipment, to Thailand.
      Flew all medical, & ancillary persons’ required to the horrific Bali bombing situation.

      QANTAS never has, never will ‘blow it’s own trumpet’ about these fabulous missions’ of help.

      Unlike Sharp who can’t keep his big trap shut at all.

  • Steve A

    says:

    Martin and Vannus, it is clear that you are both Joycites, something that I am not.
    John Sharp is absolutely correct, Qantas is probably almost certainly insolvent, given the extent of its indebtedness.
    Qantas owes Australians billions of dollars in IOU’s for airfares paid but not supplied. I doubt that it could survive if it was forced to do what I called the Government to do many months ago – to have to refund people in cash.
    No other industry in Australia is allowed to take people’s money without providing a service, and without having to provide refunds to people.
    We saw the banks do it, and they got caught out in the Royal Commission.
    We had a Senate Qantas Inquiry in 2014, remember?
    This was to find out the shenanigans going on at Qantas that were sending it broke.
    In 2014, Qantas was technically insolvent too, but Qantas management kept on selling tickets without refunding them too, and the only thing that saved Qantas from going down the gurgler then, was its ability to fund its current business from future airfare sales.
    This is dodgy business practice. It should be illegal. The only reason that I can think of for not clamping down on it, is that the Government probably believes that it will sort itself out in the wash over time, without the need for as much public money as would otherwise be required.

  • Gary Westen

    says:

    Good on ya sharpy! Feels threatened by the QF group so throws utter rubbish into the air. Nice one. Remember , your home isn’t in the country. It’s in Singapore.

  • Kendrick

    says:

    There’s only one desperate, & that’s Sharp.

    Why else would he continuously have goes at QANTAS if all was well with the income from his airline, Rex?
    It may literally ‘pay’ him to step back, eat some ‘humble pie’, because he doesn’t know what might happen in the future, for his company.

  • Bertu

    says:

    I worked for Qantas for almost 30 years and its shocking to see they still haven’t changed one bit..Its always money for them..no matter what..and using inflated ego and bullying tactics especially on their staff is their specialty..I would love to see a more deserving company that’s people friendly get the top spot in Australia..TAA back in the 80s was so much better and lovely peoples company focused on customer safety and satisfaction.

    • Kenneth

      says:

      Know a retired QANTAS staff member of 35 very happy years’ service with the Company.

      I suppose a job is what you make it, & QANTAS made it an excellent career in this instance.

  • Highflyer

    says:

    I’m happy to fly Rex.

  • Highflyer

    says:

    I’m happy to fly Rex any time.

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