Originally Posted by
minigundiplomat
I hope Rex aren't deliberately misleading the ASX......
They're certainly being highly selective. Take the statement that they have improved their cash position by 1000 percent since March 2020 for example. The first thing to note is that 1000 percent of, or ten times, nothing is still nothing. Those who have been following along at home will remember that in March last year Rex were making media statements saying that cash was fast running out.
Their cash position as at March 2020 would likely have not exceeded around $3 - 4 million, if that. So now they might have $30-odd million in cash for forward ticket sales. That number means jot if it will cost them $50 million to operate the flights to satisfy those sales. There's the rub.
Separately, I'd be interested in how effective Rex's hedge book is - fuel prices are not going to be kind to them. Back of the napkin, even at $79 a ticket they need something like 40 pax on a Sydney-Melbourne flight just to cover the fuel (at $39 they effectively need a full aircraft just to cover fuel). I don't think that they are routinely hitting that number. When you add lease costs, wages and maintenance the numbers become diabolical.