neville_nobody
31st Aug 2009, 04:26
It looks like REX are trying take out the RFDS contracts in the NT and QLD. Reading between the lines REX would be of the belief that they can do it more efficiently than the RFDS. How this transpires will certainly be interesting.
Regional Express's medical pitch hits ill-wind
Steve Creedy, Aviation writer | August 28, 2009
REGIONAL Express is making a billion-dollar-plus push for patient transport contracts in three states and the Northern Territory as it seeks new business to underpin its growth.
Rex's Pel-Air subsidiary came under fire after it beat incumbent the Royal Flying Doctor Service to become the preferred tenderer for a $70million a year fixed-wing patient transport service with Ambulance Victoria.
The regional operator confirmed it had tendered for similar services in NSW and Queensland, as well as the provision of aero-medical evacuation and intra-hospital transfer services in the Northern Territory.
The move is part of a wider push to diversify the regional operator's business that includes mining contracts in Queensland that are underpinning new passenger services in the state.
But the move to expand the aero-medical business has not been without controversy. It has upset the RFDS and its supporters, prompting warnings from the medical service that it will have to seek increased donations and further government support for its remote-area services if it loses the contracts.
More recently, it caused a furore in Queensland that prompted Premier Anna Bligh to reassure the RFDS its existing contract was safe. But Ms Bligh said there was no guarantee the outback icon would win an additional tender for increased aerial medical services in the state's central and north.
NSW opposition spokeswoman on health Jillian Skinner also this week called on the Rees government to explain what was happening with the RFDS.
However, Rex executive chairman Lim Kim Hai said emotions should be taken out of the argument. "I think (that) the realistic governments have come to the view that this is something where we should see who can do it best," he said.
Mr Lim said he was unable to discuss how much individual contracts were worth, but estimated they collectively stood at more than $1 billion over 10 years.
He said the airline had been restrained in its response to the RFDS criticism because evaluations were still under way.
But the Flying Doctor had not always held the contracts, having won them from a commercial operator the last time they come up for tender.
The contracts were also for the provision of aircraft and pilots only.
"There's no medical content," Mr Lim said. "So we must not think that the Flying Doctor is any more skilled or any more equipped to perform this job than Rex.
"We know about pilots, we know about aircraft, we know about maintenance.
"Really, we must take the emotions out of this."
Mr Lim said both Rex and the RFDS provided good services to the bush and the government took the view that if Flying Doctor services to remote areas should be subsidised, that should happen.
"Let's be transparent," he said. "If you find certain other things are needed, pay for it separately and for this, a commercial contract, let's see who provides the best efficiency, which is what happens in the real world."
Rex this week defied wider airline industry trends to post an annual net profit of $23m, down 5.6 per cent, but said conditions remained too uncertain to provide an outlook.
The Rex chairman said a further fall in passenger numbers represented the biggest risk on the downside.
Passenger numbers fell 12.8 per cent in 2008-09 and while indications in the past two months were that numbers had stabilised, the airline was still unsure whether the decline had hit bottom.
"If it does come down further, it's going to hurt us," he said. "We have been able to cope with these (2008-09) reduced passenger numbers and if it stabilises, or if it improves of course, we can do much better."
Rex has also managed to increase average fares over the year after cutting them for the past six, although this was helped by lower fuel prices and surcharges.
Mr Lim said fares were still lower than they were six years ago, even with fuel prices fully costed in.
"I guess that we were fortunate that we were able to bring it down so much that when we needed it, we could maintain it at a higher level without too much damage on the passenger numbers," he said. "So it's a bit of payback for all the effort that we did over the past years."
Rex is not hedged against fuel and Mr Lim said rising prices continued to be a worry, although this had been offset by a higher Australian dollar.
Regional Express's medical pitch hits ill-wind | The Australian (http://www.theaustralian.news.com.au/business/story/0,28124,25989952-23349,00.html)
Regional Express's medical pitch hits ill-wind
Steve Creedy, Aviation writer | August 28, 2009
REGIONAL Express is making a billion-dollar-plus push for patient transport contracts in three states and the Northern Territory as it seeks new business to underpin its growth.
Rex's Pel-Air subsidiary came under fire after it beat incumbent the Royal Flying Doctor Service to become the preferred tenderer for a $70million a year fixed-wing patient transport service with Ambulance Victoria.
The regional operator confirmed it had tendered for similar services in NSW and Queensland, as well as the provision of aero-medical evacuation and intra-hospital transfer services in the Northern Territory.
The move is part of a wider push to diversify the regional operator's business that includes mining contracts in Queensland that are underpinning new passenger services in the state.
But the move to expand the aero-medical business has not been without controversy. It has upset the RFDS and its supporters, prompting warnings from the medical service that it will have to seek increased donations and further government support for its remote-area services if it loses the contracts.
More recently, it caused a furore in Queensland that prompted Premier Anna Bligh to reassure the RFDS its existing contract was safe. But Ms Bligh said there was no guarantee the outback icon would win an additional tender for increased aerial medical services in the state's central and north.
NSW opposition spokeswoman on health Jillian Skinner also this week called on the Rees government to explain what was happening with the RFDS.
However, Rex executive chairman Lim Kim Hai said emotions should be taken out of the argument. "I think (that) the realistic governments have come to the view that this is something where we should see who can do it best," he said.
Mr Lim said he was unable to discuss how much individual contracts were worth, but estimated they collectively stood at more than $1 billion over 10 years.
He said the airline had been restrained in its response to the RFDS criticism because evaluations were still under way.
But the Flying Doctor had not always held the contracts, having won them from a commercial operator the last time they come up for tender.
The contracts were also for the provision of aircraft and pilots only.
"There's no medical content," Mr Lim said. "So we must not think that the Flying Doctor is any more skilled or any more equipped to perform this job than Rex.
"We know about pilots, we know about aircraft, we know about maintenance.
"Really, we must take the emotions out of this."
Mr Lim said both Rex and the RFDS provided good services to the bush and the government took the view that if Flying Doctor services to remote areas should be subsidised, that should happen.
"Let's be transparent," he said. "If you find certain other things are needed, pay for it separately and for this, a commercial contract, let's see who provides the best efficiency, which is what happens in the real world."
Rex this week defied wider airline industry trends to post an annual net profit of $23m, down 5.6 per cent, but said conditions remained too uncertain to provide an outlook.
The Rex chairman said a further fall in passenger numbers represented the biggest risk on the downside.
Passenger numbers fell 12.8 per cent in 2008-09 and while indications in the past two months were that numbers had stabilised, the airline was still unsure whether the decline had hit bottom.
"If it does come down further, it's going to hurt us," he said. "We have been able to cope with these (2008-09) reduced passenger numbers and if it stabilises, or if it improves of course, we can do much better."
Rex has also managed to increase average fares over the year after cutting them for the past six, although this was helped by lower fuel prices and surcharges.
Mr Lim said fares were still lower than they were six years ago, even with fuel prices fully costed in.
"I guess that we were fortunate that we were able to bring it down so much that when we needed it, we could maintain it at a higher level without too much damage on the passenger numbers," he said. "So it's a bit of payback for all the effort that we did over the past years."
Rex is not hedged against fuel and Mr Lim said rising prices continued to be a worry, although this had been offset by a higher Australian dollar.
Regional Express's medical pitch hits ill-wind | The Australian (http://www.theaustralian.news.com.au/business/story/0,28124,25989952-23349,00.html)