That's of course if they decide to compete with REX G.G?
Personally I can't see it. The Regionals are profitable, REX because of their agressive program of debt minimisation, QLink because of their economies of scale, but most of all due to the virtual monopolies enjoyed by these carriers over 90% of their routes. The monopolies aside though, both these carriers have manged to make Regional flying approx 50% cheaper than what it was a decade ago. This has been through some competition on a few sectors, but mainly because of a rationalisation of the previous route structures. Many Regional centres have lost their air service simply because they were marginal. I mean Hell, REX wouldn't still be in QLD if the routes weren't subsidised!
Profitable as they are however, the margins are still thin. For an operator to effectively compete, a substantial capital outlay would be required for what would be at best a 5% P/A return on investment?
If
VB do intend to compete, then as well as the issues mentioned above, there is the problem of crewing. Most REX pilots (other than the Cadets of course) would probably move for a Jet job, but to go sideways? Anyway the major airlines (
VB included) will probably be focused on recruiting the last available experienced pilots for mainline. My sources tell me that
VB will be looking for at least 110 pilots by April, and Jetstar quite a few more than that before the end of the year! No point starting a Regional airline if you can't get pilots to fly it.
The logical choice (if you can call any of this logical) would be, as Red Jet alluded, for
VB to buy REX. That would be interesting. You never know Red Jet, they may offer you a DEC. At least your pay would go up.
