Something is bound to happen there, it's just a matter of time I guess
Report in the Australian today:
"Regional Express Airlines may be on the radar of prospective suitors, with sources close to the carrier saying it has conceded that it would be a willing seller at the right price.
Various private equity firms are understood to have approached the airline, with the view of snapping up the carrier at a time when it posted its first half-year loss in a decade.
Virgin and Qantas are seen as the logical acquirers by many, but sources within the Virgin camp said an acquisition of Rex was not on its agenda, while the understanding is that Qantas would likely face opposition for a purchase from the Australian Competition and Consumer Commission, with a deal only likely to be possible for Qantas should the regional airline collapse.
Rex, which is listed on the Australian Securities Exchange, dominates regional routes rarely flown by Qantas and Virgin, and is widely regarded as having a good track record for on-time flight arrivals and departures.
The airline has the world’s largest fleet of the 34-seater Saab 340 aircraft, with 52 planes. Of those, 40 have been fully paid for in cash, and the rest with a two-year remaining mortgage. This year’s interim loss was at the time blamed on the cancellation of a lucrative contract with the Australian Defence Force, triggering at least $18 million in writedowns.
Despite the fall in earnings last year and the latest loss, the group still made $9.3m in net profit against $250m in revenue in the 2015 financial year.
The airline has an attractive balance sheet, and is considered to have been on a golden run for the past decade.
But last year the group reversed its guidance and declared it was facing another fall in profit for the 2016 financial year. Compounding the problems has been industrial action from its pilots over new pay conditions and a reduction in business from fly-in fly-out miners on the back of the challenges faced by the resources industry.
The company’s market value sits at around $85m, and it has about $281m of assets on its balance sheet, including $200m worth of aircraft and at least $20m of cash, while liabilities sit at just $86m, more than a quarter of which is debt and finance leases for aircraft."
The Australian