Originally Posted by
neville_nobody
Please stop using that word. It shows such an self entitled mentality that obviously runs through the entire business. By definition no one can poach pilots or air routes in Australia it is impossible. For something to be poached you have to have ownership. If a Pilot wants to resign and go to a operator that pays a higher salary it is not poaching. Same with air routes. If QF want to fly anywhere that is not regulated they can do that. It is not poaching.
Ok if that word offends you I’ll stop using it. My point was a smaller airline builds a new or lower passenger route up to the point that it’s profitable for them, then a larger competitor moves in and takes over. Feel better now?
You can argue ‘that’s competition’ and hopefully it gives a better outcome for the consumer. But it can also be highly anti competitive, stopping a smaller competitor from growing to the point they pose a serious threat. The Tech giants (FB/Apple/Google) have all been accused of similar anti competitive actions in that market.
Also RE: the other comments. ‘Rex will go bankrupt’. They weren’t wrong and without government assistance they would have. Doesn’t take a genius to look around the world and realise that the airlines without government support are unlikely to survive.
Rex also said ‘we won’t transport COVID tests’. Again not wrong. Without government support they would have shut down their network. Can’t carry tests without a network.
Rex also called ‘force majure’ on the QLD network. This is partly subsidised and probably comes with a minimum frequency in the contract. Again if the pax numbers drop and they’re not profitable anymore, why should Rex continue to fly that route?
The government has announced various support packages for the aviation industry.
Domestic Aviation Network Support. $165 million ONLY for VA/QF. Subsidy to operate minimum domestic services.
Regional Aviation Support Network. $198 million to cover minimum services a week across ALL regional RPT networks. $100 million of this is set aside for direct assistance to any regular RPT operator (there are 12 by the way, I’d argue REX is the largest of these 12...).
Australian Airline Financial Relief Package. $715 million which covers Airservices charges. Basically only works if you’re flying. But also gives the most $$ to the operator with the biggest network (probably QF).
There’s also the freight subsidy to ensure food products can get to market overseas.
So QF/VA get access to upto $165 million between them. Rex have to share $98 million between 12 companies (of which they are by far the largest). The direct assistance ($100 million) to regional airlines is arguably crucial to their survival, they’re probably the weakest financially vs the majors.
I’m going to take a guess and say if no assistance had been offered by the Federal Govt, Rex would have shutdown their entire network and pushed all their staff on to JobKeeper. They own almost all the Saab’s outright and had a reasonable cash reserve. So they could have held on for a while. Maybe they could have also refinanced some for $30 million in cash to keep going. This would have resulted in a far weaker company at the end of COVID. Plus the other 11 regional RPT airlines would have also been under significant stress, most likely some would have gone under.
The assistance packages are definitely ‘tailored’ towards different parts of the industry. But so they should be. QF made $1 billion profit, they have substantial assets to survive with and a dominant market position. VA were screwed before all this began. Regional airlines run older aircraft with thin margins and lower passenger numbers. They have less ‘room to manoeuvre’ given the current conditions.
Remember ALL airlines have access to JobKeeper to at least retain their employees. How they’ve organised all their other assets (cash/aircraft/etc) will determine how they survive this crisis.