REX Fleet Expansion and 1st Half Profit- 9.3mil

[Shapeshifter]

Rex may expand fleet over next 12 months
February 20, 2006 - 9:29AM
Airline Regional Express Holdings Ltd says it could expand its fleet of aircraft by as many as five over the next 12 months. The company reported a sharp rise in first half net profit to $9.3 million, having listed on the Australian Stock Exchange in November, 2004.
Rex managing director Geoff Bruest said the company was looking to expand and the fleet was expected to grow over the next year.
"We are certainly looking at the possibility of acquiring as many as five (aircraft) over the next 12 months or so," Mr Bruest told AAP.
"We are going through a review process (but) there are no specific arrangements in place."
He said the company was also looking to convert some of its operating leases into acquisitions.
"As the operating leases are coming up on the aircraft, we (will) look very seriously about buying those out and bringing them in as wholly-owned," he said.
Rex currently has 29 aircraft in its fleet. The company forecast a net profit of $15.1 million for 2005/06, saying it had experienced a better than budgeted performance in December 2005.
The company said that despite reporting a strong first half result, it would not up its full year estimate as the second half is traditionally slower the first half.
© 2006 AAP

Amongst all the unfortunate discussions in pay and conditions, REX pilots, Engineers and FAs can look forward to nice little bonuses mid year with the profit sharing arrangements in place with the EBA.

Coupled with the fact that REX has all training in house and no up front endorsement costs this dark horse is moving ahead, the canter turning into a gallop!

Share price up to $1.14..... :ok:

http://www.smh.com.au/news/Business/Rex-expects-to-meet-profit-forecasts/2006/02/20/1140283974572.html

[drshmoo]

Good times for rex then, will there be a new type?


No upfront endo costs, Amen to REX

[chief wiggum]

having listed on the Australian Stock Exchange in November, 2004.


for the record, they listed NOV 2005

[mattyj]

If they want to go for more Saabs, theres going to be a few going on this side of the Tas..Air Nelson had two parked at NZAA the other day for a couple of days..make an offer!

Shame..the old Saab is a real classic..built solid too

[Howard Hughes]

9.3 Million, that should buy a few buses for Adelaide Aiport!!;)

[skurgler]

Good on ya Rex,
But ?
Haven’t Rex been advising profits every year that they have been operating, how can this be a maiden profit ?
Or has Rex been a little careless with the truth or accounting methods prior to the share market float ? i.e. misled with ‘profit’ statements and gave a false picture of the company to potential investors.

[Shapeshifter]

Rex Chairman Propels Maiden Profit
Industry leaders lag in the slipstream, writes Steve Creedy

http://www.theaustralian.news.com.au/common/story_page/0,5744,18250751%255E23349,00.html

February 24, 2006
FOR Regional Express executive chairman Lim Kim Hai, this week's maiden interim profit of $9.3 million was doubly satisfying.

Not only had the Singapore-based investor presided over a dramatic turnaround in the previously troubled carrier, he had done it in an industry in which he had no prior experience.

And he had kept his 2004 promise to take Australia's biggest regional airline from the brink of financial disaster to a return most airlines only dream about: a healthy 17 per cent revenue margin.

That puts it well ahead of the 12 per cent industry leaders such as Singapore Airlines and Southwest Airlines

"It was a really steep learning curve for me," he says. "Even steeper by the fact I'm in Australia once every three months or two months. If you are sitting right in the middle of the action, you probably can pick up things a bit faster, but being so far away I've really had to compensate for the distance in other areas."

Rex was bleeding money when shareholders ousted management and took over direct control in August, 2002.

Under Lim and chief executive Geoff Breust, the airline restructured and adopted new strategies to begin a steady climb back into the black that culminated with a successful float in November.

The company also moved last year to take a 50 per cent stake in freight and charter company Pel-Air, and last November bought NSW regional carrier Airlink.

Monday's half-yearly net profit, the first since the float, was 244 per cent up on the previous period on revenues that rose 18 per cent to $77.9 million.

The company's cash position improved 440 per cent to $24.3 million as its net assets grew 190 per cent to $65 million with a debt to equity ratio of 7 per cent.

The increases, accompanied by an 11 per cent rise in passenger numbers to 584,000, came despite the high fuel prices that are predicted to produce a global loss in the aviation industry this year of $US4 billion.

Officials are confident they will meet full-year predictions of $148.6 million in revenues and a net profit of $15.1 million. They also believe there is enough growth potential to warrant adding five Saabs to the existing fleet of 25 as the airline phases out its four Metroliners.

Lim describes the maiden result as "extremely gratifying" but noted the high growth had been evident at Rex for the past two or three years.

He now expects it to drop back to more realistic levels.

"You can see the earnings growth of about 250 per cent and obviously no company in the world can sustain this. But I think that an airline that is managed well can grow ... very reasonably in the order of 15 to 20 per cent on a long-term, sustainable basis."

Rex officials say one advantage of making money is that the airline can improve its service to the regional centres it serves across NSW, Victoria, Tasmania and South Australia.

While they have no set plans to expand the airline's network, they are watching closely for opportunities. Rex has also moved to reduce fares from between $150 and $170 one-way to come closer to the $100 mark.

"We believe that we have a strong regional airline and it's something that's good for the bush."

The Singaporean also remains impressed by the commitment of the airline's staff.

Two years ago he said that commitment was a main factor in investors' decision to press ahead with a project that looked dubious at best.

He says it still gives him great satisfaction to see people who are passionate about their jobs.

"We see our staff now stand tall and proud and say: 'Yes, we are a small airline but we are very good, the best in the world in terms of performance'," he says. "I think that's very satisfying."

Success and satisfaction, however, have not given Lim a rose-tinted view of a difficult industry.

Asked whether he will buy into another airline after the success of his first venture, he smiles and replies: "I wouldn't be going into another airline in a hurry.

"Today, if it were not for the fuel levy of $22, our fares would be something like 40 to 50 per cent what they were two years ago," Lim says.

"So while we are proud to be successful, we believe we provide a social service to the bush and we are also proud of that."

[turbantime]

Hmm, looking at 5 new aircraft.....replacing Metros....

Don't know if SAAB's will replace the Metros on the thinner routes but rumours are out there of 1900D's. That Dubbo based wholly owned subsidiary already operates one so there goes the intial startup costs of a new type.

[podbreak]

don't be fooled by the smoke and mirrors, somehow I think the fleet expansion will come in the form of a merger/takeover... lets say maybe a large queensland saab operator perhaps? hmmm...
I don't think they'll stop at airlink...

[Bendo]

If the above article was written for the business/financial press, or the media release was written for the financial press, the "maiden profit" would be the first since listing on the ASX, NOT since start of ops! :ooh:

[nomorecatering]

Podbreak your on the money. I predicted Rex would take over Airlink 2 years ago, as well as Mackkkair. A Rex / Mackkkaiir marriage would creat a fleet of some 50 + aircraft with a huge route netwok and would be an awesome regional competitor, covering the Eastern half of Oz from Hobart to Horn island.But thats only to start. Embraer jungle jets to come, then later some equipment from the other plane maker that starts with B....to link up the capital cities.

Watch this space.

Does anyone know what percentage of the company was placed on the stock market.

[Southern handler]

Wasn't it 30 percent.

Hobart?? - I dont think any of the said operators are operating to our southern capital and would need some much larger craft to make a go of it.

[Shapeshifter]

REX UPGRADES FOR REGIONAL PASSENGERS TO SOUTH AUSTRALIA AND BROKEN HILL

28 February 2006

South Australia’s largest regional airline, Regional Express (Rex) continues to strengthen its commitment to regional South Australia by upgrading its aircraft fleet as well as introducing additional services on key routes starting 5March 2006.

Ceduna, Whyalla, Broken Hill and Mt Gambier will see various services previously flown by 19 seat Metro 23 aircraft replaced with 34 seat Saab 340 aircraft with in-flight service and toilet / washroom facilities. In addition, Rex schedules have been revised to improve the timing for regional passengers flying to Adelaide.

Commenting on changes to the Adelaide network Rex’s Managing Director Geoff Breust said “This is a continuation of our strategy to grow regional air services across our network. Our commitment to regional South Australia is a high priority. With passenger demand continuing to grow, Rex is pleased to bring a higher level of service with our larger Saab aircraft and increased frequencies at other times using our 19 seat Metros.”

Changes to Rex’s operations to commence on 5 March are as follows:

Ceduna to Adelaide

- Saab service departing Adelaide at 5:25 pm and returning at 7:15 pm on Sunday to replace Metro service currently departing Adelaide at 12:10 pm and returning at 2:00 pm to offer regional travellers a later flight after the weekend and cater for strong demand.

- Saab to replace Metro service departing Adelaide at 5:25 pm returning at 7:15 pm on Monday and Friday

- Saab to replace Metro service departing Adelaide at 7:10 am returning at 9:00 am Monday and Friday.

- As a result morning and evening return services Mondays and Fridays and the Sunday evening service will be operated with larger Saab aircraft in addition to the current Metro 23 services

- Available seats have increased by 23 percent as a result of the Saab services.

Whyalla to Adelaide

- Additional Metro service departing Adelaide at 2:25 pm and returning from Whyalla at 3:30 pm each Wednesday and Thursday

- Saab service to replace Metro service departing Adelaide at 2:25 pm and returning at 3:30 pm on Friday to provide greater capacity on Friday afternoons

- Saab service departing Adelaide at 2:25 pm and returning at 3:30 pm on Sunday replacing Metro service currently departing Adelaide at 9:10 am and returning at 10:15 am offering travellers a later weekend flight to maximise time spent in either Adelaide or Whyalla.

- Available seats have increased by 11 percent as a result of these changes

Mt Gambier to Adelaide

- Friday Metro service currently departing Adelaide at 11:30 am returning from Mt Gambier at 1:00 pm will depart Adelaide at 11:00 am and return at 12:30 pm and operated with larger Saab aircraft

Broken Hill to Adelaide

- Saab aircraft will replace Metro aircraft on Saturday service departing Adelaide at 6:40 am arriving in Broken Hill at 7:50 am and returning from Broken Hill at 8:05 am arriving in Adelaide at 9:20 am

Rex operates services to Port Lincoln, Whyalla, Mount Gambier, Ceduna, Olympic Dam, Coober Pedy, Kingscote and Broken Hill. Rex is also Australia’s largest listed regional airline operating over 1,100 flights weekly on 33 routes from Sydney, Melbourne and Adelaide with a fleet of 29 aircraft.
Mr Breust said that Rex’s strategy in bringing affordable fares and quality services to regional Australia had been the catalyst for significant increases in passenger growth. The airline, which listed on the ASX last November, released its half yearly results last week with a threefold increase in Net Profit after Tax to $9.3m on revenues of $77.9m.

Rex recently opened a special corporate lounge facility at the new Adelaide Airport Domestic Terminal. Members to the lounge can sample the fine food and wine supplied by Boston Bay Wines while enjoying state-of-the-art High-Definition television on the Panasonic Viera Plasma Screen. The lounge is set up as a wireless hotspot; meaning business travellers are able to remotely check emails and access the internet at broadband speeds using wifi-enabled laptops or handheld devices. Membership can be secured via the Rex website.

Rex is also working closely with Adelaide Airport Limited to revise facilities at the new terminal building to give regional travellers a better deal.

[Skystar320]

Hmm, looking at 5 new aircraft.....replacing Metros....
Don't know if SAAB's will replace the Metros on the thinner routes but rumours are out there of 1900D's. That Dubbo based wholly owned subsidiary already operates one so there goes the intial startup costs of a new type.


Bloody hell my heart nearly gave me a heart attack!!!!!!!!!! Hmm turbantime do you know something that i know?????????????

Well its going to be very intresting the next couple of months :cool:

[turbantime]

Rumours rumours rumours! :p

[Skystar320]

sometimes its more than rumours