Originally Posted by
mikewil
Can anyone speculate as to why the regional arm can't potentially be considered profitable in its own right to justify its purchase?
Rex management cocked it up by neglecting it during their grand plans for the 737 op, but prior to that Rex was profitable in its own right for virtually its entire existence as a regional only operator.
Sure the Saabs are old and many are not in serviceable condition (thanks again to management) but is there a reason why a new owner of Rex wouldn't be able to bring the operation back to what it once was and continue to operate the ageing aircraft (because while they are old, they are cheap and relatively reliable when looked after)?
Yes, the old regional operation could be profitable particularly if the new owner tied up codeshares and Velocity membership with VA but, as you point out, it is the capital required to plan for a replacement for the Saabs that is the hurdle. Even buying secondhand ATR42s or Dash8-300s would be an expensive exercise once you factor in training, maintenance facilities, sims etc.