The federal government is keeping an “hour by hour” watch on regional airline Rex amid rising concerns the carrier is in trouble.

Rex’s shares went into a trading halt on the Australian stock exchange on Monday following recent boardroom turbulence and multimillion-dollar losses.

Rex Airlines stopped selling seats on major routes on its website as rumours swirl about the company’s future.

The trading halt also came amid reports Rex had called in consultancy firm Deloitte to review the airline’s books. Deloitte referred media inquiries to Rex.

Prime Minister Anthony Albanese questioned the airline’s expansion into major city routes.

Albanese said he would consider proposals to save the company, but added Rex already received substantial public funding with “no conditions attached”.

“One of the things I expressed concern about was having no conditions so Rex, for example, moved away from their traditional role of being a regional airline into flights, for example, from Sydney to Melbourne,”  Albanese told reporters.

Rex began servicing Sydney to Melbourne, one of the busiest routes in the world, in 2021.

As of Tuesday afternoon, Rex’s website showed no available flights from Wednesday onwards.

“Now Rex, as a regional airline, of course, provides important links with regional communities, and particularly between capital and regional communities is important for those local economies,” Albanese said.

“We want to see the aviation industry in Australia continue to be one that provides services and access.”

An announcement is expected by the opening of trade on Wednesday.

“In the meantime, it isn’t appropriate for us to make any further comments,” a Rex spokesperson told AAP.

On Tuesday, the Australian Financial Review cited a letter from lawyers representing Deloitte’s aviation restructuring experts saying their clients were not seeking to be appointed voluntary administrators of Rex.

The Australian reported the Rex board was instead awaiting a report from consultancy firm EY.

Transport Minister Catherine King said the government was in contact with the airline.

“Regional Australians rely on Rex,” she said.

“It’s an incredibly important airline. In many cases, it’s the only airline going into a range of smaller country towns and people are heavily reliant on it.”

Rex employs about 2000 people.

“We are treating this very seriously and being very vigilant about what is happening, and keeping an eye on the situation hour by hour,” King said.

Unlike Bonza, which recently collapsed, Rex mainly owns rather than leases its planes.

Its key fleet comprises 61 SAAB 340s and seven leased Boeing 737-800s, out of a total of 123 aircraft.

Many regional communities rely on the carrier, which emerged 22 years ago following the collapse of Ansett.

The government was putting contingencies in place to ensure travellers could get services in those areas, King said.

Since the Covid-19 pandemic, Rex has struggled with profitability alongside other airlines.

In February, it reported a bottom line net loss of $3.2 million for the first half of the 2023-24 financial year on the back of rising costs, especially for fuel.

However, that improved on the $16.5 million loss reported in the previous corresponding period.

In June, Rex announced long-serving executive chairman Lim Kim Hai was stepping down.

He remained on the board as a non-executive director.

Earlier this month, Lim, a significant shareholder, requested a general meeting of shareholders to remove directors including non-executive chairman John Sharp.

Rex shares last traded at 56.5 cents on Friday. They were at 79 cents a month ago.

-AAP