Originally Posted by
nomess
It’s quite frustrating to read that, again, another case of airline management down under who burn the house to the ground and wait until only smouldering pieces remain before calling in help, front line workers and families now suffer the consequences.
It didn’t need to be like this, I think this 737 operation could have worked, could have been done differently, but it’s been done the Rex way. It’s clear PAG are not offering further funding.
Rex needs to go back to being Rex. The issue is, the old Rex is also wounded with a depleted Saab fleet. Disposing of the Jets and going back to ‘what once was’, isn’t that easy either.
They had a sustainable, stable operation financially and otherwise that had taken years to build up. They asked the Government for, I think it was $180M, during covid saying that if they didn't get it their regional operation would suffer. They got the money, probably in no small way because their deputy Chair used to be a Minister and in the National Party (he was the one that privatised the airports, what a clown) AND they then proceeded to use the money to buy or lease 737s.
If the Govt. at the time had any scruples it would have demanded the money back as having been requested on false pretences.
There'll now be a chorus of Qantas and Virgin hating media, saying that they, especially Qantas, stop entrants from coming into the market. Bull****. That's just a smoke screen for horrendously bad management. They had a reasonable operation, they had factored in the gradual replacement of the SAABs over a period of years and then they decided to do this ridiculous capital city operation in an arena they'd never operated in before, lacked expertise (and at least some of those I heard were poached from elsewhere were hardly the best of the best) and for what? What did they hope to achieve?
Having done so, it obviously was not providing the returns they expected (or over-estimated) so what did they do? Reduce flights? Slow the expansion? Nope. They went full speed ahead eventually adding PER to the route network and they also bought another operator that specialised in FIFO.
This is either phenomenal incompetence or delusions of grandeur. It would appear to not be wisely investing shareholders' funds at the very least.
As for the criticisms of Qantas from the TWU, how surprising (not). Rex actually undercut Qantas and started a fare war between Qantas, Virgin and themselves. Qantas responded by operating on some of Rex's routes. That's competition.
If you run a fancy bread shop and also sell milk and the local milk bar decides to start selling fancy bread too, you're going to do something like start undercutting what you sell milk for to hit them back.
Media and also the TWU seem to think that Qantas and Virgin should just sit around and do nothing if a new entrant comes into the market. QF and VA have shareholders too.
One day the penny will drop that we are a nation that occupies a continent about the same size as the contiguous United States but with less than a 10th of the population. To succeed you either need scale like QF and VA or you need a niche. How many times does this have to happen before we realise the country cannot support more than two large airlines and a few smaller ones in niches. Break up the bigger airlines and the new smaller units will likely fail due to lack of scale OR they'll consolidate, exactly like what has happened in the USA since 1978. It's now about the same as it was in 1978, just some of the names have changed.
Canada - similar in scale and size to Australia with a slightly larger population and what do they have? Basically two major carriers.