REX to transition to ATRs, start domestic jet ops

[dijical]

Media release (https://www.trading.macquarie.com.au/file.type?src=lEih7mNYKUKF43yp7Q5oQJoZwmWOmN%2fP)

[missy]

29 JUNE 2020

ASX RELEASE
REX BOARD HAS APPROVED PLANS FOR DOMESTIC OPERATIONS

Following the announcement to the ASX on 13 May 2020 of the Regional Express Group’s intentions to explore the feasibility of commencing domestic operations in Australia, Regional Express (Rex) has been engaged in confidential exploratory discussions with various parties to assess the availability of funding for starting up domestic operations.

The Rex Board has now formed the view that Rex could successfully embark on domestic operations. Consequently, the Board has approved an initiative to raise a minimum of AUD$30 Million, which the Board now believes will be all that is needed for the launch of limited domestic operations, through one or more of the following avenues: sale-and-lease- back arrangement, equity injection and convertible notes.

Discussions with interested parties including lessors and private equity funds have not been finalised and the Board will reconvene within three weeks to decide on the structure of the fund raising and the maximum amount that will be raised. Where necessary, the Board will seek shareholder approval for the fund raising.

Due to the strong interest shown by various external parties to participate in the fund raising, including lessors willing to provide AUD$30 Million for 15 of Rex’s fleet of 60 unencumbered Saab 340 aircraft, the Board has now formed the view that funding will be forthcoming for the minimum target sought. Consequently the Board has authorised management to commence preparations in earnest for the operation of an initial fleet of five to ten narrow-body jet aircraft to be based out of Sydney and/or Melbourne to service the golden triangle (Sydney- Melbourne-Brisbane). The Board has confirmed 1 March 2021 as the targeted start date for domestic operations, subject to fund availability and regulatory approval.

Rex has also confirmed the execution of a non-binding Memorandum of Understanding with Avions De Transport Regional (ATR), the world’s largest manufacturer of turboprop aircraft, for a range of potential commercial co-operation that would complement Rex’s domestic operations. The scope of the potential co-operation is attached in the Schedule.

Rex’s Deputy Chairman, John Sharp, said, “Rex has the biggest regional network in Australia and we are the only carrier in Australia that has been able to successfully navigate the turmoil and shocks over the last two decades with uninterrupted operational profits since 2003.”

“With Rex’s expansive regional network of 60 destinations, existing infrastructure in all these capital city airports, superior efficiencies and unbeatable reliability, it will simply be an incremental extension for Rex to embark on domestic operations especially since one out of every ten flights in Australia was already a Rex flight during the pre-COVID days. Leveraging on Rex’s existing infrastructure and overheads, our cost base for the domestic operation is estimated to be at least 35% below Virgin’s Australia’s (pre-COVID) with 50% lower additional headcount needed proportionately.”

“Rex’s domestic operations will be priced at affordable levels but will also include baggage allowance, meals on board and pre-assigned seating. Booking channels will include both Rex direct and Global Distribution Systems (GDS). Lounge membership will be available for subscription. It will be a hybrid model that Rex has so successfully pioneered over the last two decades for its regional operations.”

This announcement is authorised by the Board of Directors, Regional Express Holdings Limited.

Regional Express (Rex) is Australia’s largest independent regional airline operating a fleet of 60 Saab 340 aircraft (pre-COVID) on some 1,500 weekly flights to 60 destinations throughout all states in Australia. In addition to the regional airline Rex, the Rex Group comprises wholly owned subsidiaries Pel-Air Aviation (air freight, aeromedical and charter operator) and the two pilot academies Australian Airline Pilot Academy in Wagga Wagga and Ballarat.

[normanton]

This will be the downfall of Rex. Anytime there is competition they whinge whinge whinge.

Successful company when they have a monopoly. Not so much when they have to compete.

[Goat Whisperer]

With all the money that the Fed government has given them, doesn't this count as a national airline/flag carrier?

[-41]

Rex’s Deputy Chairman, John Sharp, said, “Rex has the biggest regional network in Australia and we are the only carrier in Australia that has been able to successfully navigate the turmoil and shocks over the last two decades with uninterrupted operational profits since 2003.”



don't look over here, but 90 days ago we were on the verge of bankruptcy, a generous Cash bailout of $54million (non repayable)made all those issues disappear.

[normanton]

don't look over here, but 90 days ago we were on the verge of bankruptcy, a generous Cash bailout of $54million (non repayable)made all those issues disappear.
What a joke. Government should have received equity.

[-41]

nah "we can't pick winners and losers " says our PM

[Turnleft080]

Wow 30m to start a jet operation. I'm off to the bank via CASA to pick up the AoC.
Oh! That doesn't leave much left. Will work out the planes, simulator, slots, training, gates.

[ozbiggles]

Tiger mark 3?, Compass mark 3? Air Australia mark 2? Jet go mark 2?
Sounds like Singapore wants payback and it doesn’t matter what it costs them!

We all also know who will be their number one VIP in their lounges.

And start in March against a full on Qantas and some form of VA, it is going to end in tears.

[smiling monkey]

Wow 30m to start a jet operation. I'm off to the bank via CASA to pick up the AoC.
Oh! That doesn't leave much left. Will work out the planes, simulator, slots, training, gates.

$30 mill will get them 10 Fokker F100s easily, with money left to spare for the AOC!

[MickG0105]

For a business that has been simplicity incarnate for decades they sure seem keen on introducing a lot of complexity at roughly the same time. They're going from a paddle ball to juggling chainsaws. If nothing else, it'll be interesting to watch.

[TBM-Legend]

...and the loser will be Virgin Mk2 with REX potentially taking some of the cream off the cake as they struggle to get traction.

[PoppaJo]

Wow 30m to start a jet operation. I'm off to the bank via CASA to pick up the AoC.
Oh! That doesn't leave much left. Will work out the planes, simulator, slots, training, gates.
Tiger in 2007 startup costs were only $10m for 4 Aircraft and came in under budget.

[ozbiggles]

The same version of Tiger that were almost grounded by CASA for outsourcing their safety department to Singapore, that one?
The same version of Tiger that had staff busted going through Jetstar bins for stationary as legend goes at Melbourne airport? (It is after all a rumour network].

[Green.Dot]

The same version of Tiger that had staff busted going through Jetstar bins for stationary as legend goes at Melbourne airport? (It is after all a rumour network].

Classic, surprised they just didn’t repaint a Jetstar 320 with a Tiger on the side while they were at it- surely no one would notice!

[Arnold E]

Well I for one hope they are successful and maybe can soak up a few displaced people from elsewhere, not to mention shutting up a few of the naysayers.

[InZed]

Who in Australasia has spare narrow body (A320s) and ATR72s right now (that isn't in administration)...

Qantas wouldn't get ACCC approval.
Virgin/Tiger obviously don't have the money.
Alliance could swoop in, but they are quite well placed to start up this venture without REX as a partner.

I would be EXTREMELY surprised if Air New Zealand didn't step into this whole in the market. They have spare capital, spare aircraft, spare pilots and simulators for training - and they have been very public this year about their desire to extend their reach within the Australasian regional market.

[Wingspar]

This is great news!
With the loss of irrational behaviour in the duopoly from VA and Qantas, someone had to pick up the baton.
Enter Rex.
QF alone will swamp the market with cheap seats.
VA will have to follow suit to keep market share.
More jobs for all!

[Australopithecus]

Who in Australasia has spare narrow body (A320s) and ATR72s right now (that isn't in administration)...

Qantas wouldn't get ACCC approval.
Virgin/Tiger obviously don't have the money.
Alliance could swoop in, but they are quite well placed to start up this venture without REX as a partner.

I would be EXTREMELY surprised if Air New Zealand didn't step into this whole in the market. They have spare capital, spare aircraft, spare pilots and simulators for training - and they have been very public this year about their desire to extend their reach within the Australasian regional market.

Yeah that’ll go over big with the punters when there’s going to be widespread unemployment in the Australian aviation sector.
Qantas does not play well with others and I expect a vigorous response from both them and Bain.

[Turnleft080]

Here we go again, they will start up and if they fall Virgin/Bain will buy them out and call it Tiger.

[Arnold E]

Why does anybody think they will fail, they are run by some pretty switched on people, and like Mr Sharp said they have not made a loss since 2003, how many other airlines in Oz can say that...........crickets

[fmcinop]

Well it helps when you operate on either Government subsidised routes or government protected monopoly routes without competition. Of course they haven't made a loss. They have no competition.

[industry insider]

nah "we can't pick winners and losers " says our PM

Unless you give nod nod wink wink support to your old mate John Sharp. JS has been very successful squealing about bankruptcy then suddenly finding his airline on the receiving end of taxpayer largesse.

[Traffic_Is_Er_Was]

Mr Sharp said they have not made a loss since 2003,
Yet as soon as COVID struck, they needed an immediate $50+ million to survive? Must have been sailing pretty close to the wind. Funny how they can raise $30m so easily now. Maybe the Govt. should be asking why that wasn't done before the hand went out?
especially since one out of every ten flights in Australia was already a Rex flight
Easy to do when the government pays you to fly even if there is only 1 or 2 pax on board.
Well it helps when you operate on either Government subsidised routes or government protected monopoly routes without competition. Of course they haven't made a loss. They have no competition.
Yet they plan to compete on the most hotly contested routes in Australia. Looks like at mid-service levels too. Lounge access via subscription? Six reviews on Google, all negative. Let's see how it all goes for them. I guess they can prop it up for a while. They'll still have 45 SAABs to sell and lease back.

[airdualbleedfault]

30 million, should last a month.......

[BNEA320]

Rex is certainly onto a winner hear. Bains V2 deal, is not set in stone yet & could still fall over.

Rex can provide plenty of pax, from their regional routes & QF/V2 could give them pax as well (how many places does Rex fly to that no one else does ?)

One of the losers could be regional routes like to Qld ports. Qld govt might have to seduce Alliance to fly at all hours to CNS, TSV etc. Can see some back of clock flying.

[Arnold E]

Wow what a bunch of negative nellies, I would have thought everybody would have cheered them on in the hope they did good otherwise there is going to be a whole heap more people competing for your jobs.

[MickG0105]

Yet as soon as COVID struck, they needed an immediate $50+ million to survive? Must have been sailing pretty close to the wind. Funny how they can raise $30m so easily now. Maybe the Govt. should be asking why that wasn't done before the hand went out?

Spot on! Particularly when the COVID-19 Regional Airlines Funding Assistance guidelines clearly stated that
The funding is seen as a ‘last resort’ option when a range of other strategies to manage an airline’s position have been undertaken.

If they can raise $30 million against their fleet now why wasn't that undertaken right off the bat in the same fashion that Qantas managed their initial capital raising.

[exfocx]

Why does anybody think they will fail, they are run by some pretty switched on people, and like Mr Sharp said they have not made a loss since 2003, how many other airlines in Oz can say that...........crickets

Not quite what he said and potentially misleading: Rex’s Deputy Chairman, John Sharp, said, “Rex has the biggest regional network in Australia and we are the only carrier in Australia that has been able to successfully navigate the turmoil and shocks over the last two decades with uninterrupted operational profits since 2003.” Operational Profit doesn't include interest charges or taxes. In addition Rex is in a pretty empty operating environment with some state subsidies, and now it's going from the country league to the AFL!

My guess is they would try to somehow have some spilt between the two so that if it fails it doesn't drag the regional side down with it, otherwise it's a hefty gamble.

[Anti Skid On]

$30 mill will get them 10 Fokker F100s easily, with money left to spare for the AOC!
Not the cheapest to fuel. There will be plenty of others going cheap.

[dr dre]

$30 mill will get them 10 Fokker F100s easily, with money left to spare for the AOC!

$7.5 mil for an F100 in 2015 (https://australianaviation.com.au/2015/05/alliance-confirms-sale-of-two-fokker-100s/). And that’s for an aircraft almost at the end of it’s service being mainly used for low density FIFO ops, not high capacity RPT ops. And with a lower dispatch reliability than what is needed for RPT. Plus spare parts are hard to come by.

What will $30 mil get you? Not much. In 2005 it took roughly $70 million to set up OzJet (https://www.smh.com.au/business/ozjet-wants-10-percent-and-no-price-war-20050316-gdkxog.html) with 4 737-200s, and that lasted 3 months. And there was no downturn in the market then.

[PoppaJo]

Tiger has screwed enough people over in the last 13 years. Just be done with the bloody thing and call it a day.

How it has even got this far is beyond me. A senior executive from Singapore told me 10
years ago he is closing it because it’s never going to work. I didn’t argue with him. He was sacked for plotting the idea. FFS kill it off.

[harrogate]

Rex are talking about 10 x 737s.

Either $30m was a typo or they've relieved someone who has a massive surplus in the deal of the century.

[SemperFly]

$30 mill will get them 10 Fokker F100s easily, with money left to spare for the AOC!

from where?

[CargoOne]

Who told you they are going to buy 737 (or any other jets), I am pretty sure it will be leased.

[ozbiggles]

You can probably pick up a few Maxs pretty cheap....some might even have VH on them

[PoppaJo]

They won’t get A320s. Jetstar pinch enough of rex crews let alone supplying their needs with an Airbus rating included.

They will focus more on in house progression. They won’t hire a whole wave of ex type rated unionists. They should lose less Pilots to Jetstar this way also using their own with big shiny big jet rating on the horizon.

[ozbiggles]

You might like to think so, but I’m pretty sure CASA aren’t going to approve everyone only having SAAB time jumping into the LH seat of a heavy twin (intended).

[Mach E Avelli]

Stored aircraft cost money to be kept parked and airworthy. All liability, no asset.
Any savvy operator with reasonable credibility could offer a leasing company a dollar per airframe per month plus costs of maintenance and right now it would likely be accepted.
Crewi costs will be cheaper than they have been for several years.

[hoss]

I’m probably biased but EJets would make perfect sense. Plenty of experienced personnel and a great regional/domestic jet that would feel right at home on most of the existing network. A really nice aircraft.

[Turnleft080]

Sharp said right at the end of the 4 corners program "their is definitely room for 2 managed airlines".
That didn't make sense. Unless he is counting on Virgin failing. Did anyone else pick that up.
Definitely would like to have been a fly on the wall when Senator Rex and Sharpy
were in the Wagga Wagga pub.

[t_cas]

Sharp said right at the end of the 4 corners program "their is definitely room for 2 managed airlines".
That didn't make sense. Unless he is counting on Virgin failing. Did anyone else pick that up.
Definitely would like to have been a fly on the wall when Senator Rex and Sharpy
were in the Wagga Wagga pub.

Yes.
That was an interesting Freudian slip. Either Rex is bull****ting to appease the ASX non disclosure Cockup, or something more sinister is afoot.
I posit the former.

[aviation_enthus]

I agree with the minority of posters, why can’t we cheer them on?

Compared with some of the other attempts at jet services in the past, Rex is probably quite likely to succeed.

“$30 million will only last a week”

”ozjet took $70 million to set up”

”that sort of money won’t buy much”

No where have they stated they’re buying anything.
Leasing aircraft will be much cheaper upfront.

Are you all forgetting Rex is a CURRENT airline? They’re not talking about starting something from scratch FFS! They already have everything they’ll probably need to fly between BNE/SYD/MEL and even ADL. All they’re doing is adding a new type. It’s an add-on to a current airline, not a whole new application.

Plus I don’t see anyone mention the feeder traffic from the regional services they currently have. This will probably fill 10% of the seats from day 1. Some of that traffic is currently fed to VA....

(Unfortunately) About to be a bunch of rated 737/320 crew with free time. Plus the expats from EK etc returning with Boeing/Airbus time....

They’ve even got room in Wagga for a 737/320 sim in the event this works out long term....

Other than all the negative comments on here, I don’t see any ‘actual’ reasons they couldn’t pull it off.

[Progress Wanchai]

Sharp said right at the end of the 4 corners program "their is definitely room for 2 managed airlines".
That didn't make sense. Unless he is counting on Virgin failing. Did anyone else pick that up.
Definitely would like to have been a fly on the wall when Senator Rex and Sharpy
were in the Wagga Wagga pub.

I think you’ll find he said something along the lines of “room for two well managed airlines”.

The inference was very clear. His view is Australia has only had one well managed airline for a considerable time and he’d like to change that.

[captsf]

I would be EXTREMELY surprised if Air New Zealand didn't step into this whole in the market. They have spare capital, spare aircraft, spare pilots and simulators for training - and they have been very public this year about their desire to extend their reach within the Australasian regional market.

What have you been smoking? At no point have they ever stated that they want to enter the Aus domestic market. I think in a livestream Greg said categorically it wouldn’t happen. Spare Capital??? Riiiight. They’re about to draw on the loan after burning through their reserves and you think they’ll plonk airbuses on the Aus domestic route with potentially 3 competitors....I think the focus right now is staying afloat.

[oldm8ey]

Who in Australasia has spare narrow body (A320s) and ATR72s right now (that isn't in administration)...

Qantas wouldn't get ACCC approval.
Virgin/Tiger obviously don't have the money.
Alliance could swoop in, but they are quite well placed to start up this venture without REX as a partner.

I would be EXTREMELY surprised if Air New Zealand didn't step into this whole in the market. They have spare capital, spare aircraft, spare pilots and simulators for training - and they have been very public this year about their desire to extend their reach within the Australasian regional market.

I agree it is within the realms of possibility but I doubt Greg has the appetite. I think you might be in for that surprise you mentioned.

[Turbine27]

I normally stay on the sidelines and watch with my bucket of popcorn, but this time I have to speak up.

So here we are with the media talking up the worst economic situation since the Great Depression. Yet, the government have just financed Rex to compete in a pi$$ing competition with Qantas and Virgin with taxpayer dollars.

Some families are battling out there you know. A whole lot of people are not on Jobkeeper.

Does anyone remember the Qantas response after 9/11 to Virgin Blue and Impulse? I do. They bought a whole lot of ex BA 767s and flew a whole bunch of the them on top of there existing fleet for years and stitched up two thirds or more of the SY-MEL-BN market in no time.

What will be QFs response this time on the SY-ML-BN routes, 787s, 747s, A380s, A330s? that's some fleet they can draw on-nothing going on with those aircraft types internationally right now. I haven't even talked about the Jetstar reponse.

So knock yourself out Rex. It's a free country. My taxpayer dollars already fund most of your routes, why not have a stab at SY-MEL-BN, it's on me. Enjoy ya little jet foray and after a few months when we have no jobkeeper or jobseeker you can ponder why no one is boarding your Saabs or jets, because perhaps there will be no money left in the piggy bank.

[Wizofoz]

Sharp said right at the end of the 4 corners program "their is definitely room for 2 managed airlines".
That didn't make sense. Unless he is counting on Virgin failing. Did anyone else pick that up.
Definitely would like to have been a fly on the wall when Senator Rex and Sharpy
were in the Wagga Wagga pub.

I think this is the point. If Virgin don't re-emerge, the first one to get operations going will be able to right size, right price and only have QF, which is carrying a huge burden of unused aircraft and pending redundancies, to compete with.

Compete against QF AND a trimmed down Virgin? Lunacy.

Remember, VB was hemorrhaging before the AN collapse- Branson might just have taken that cheque. AN exiting meant VB surviving.

VA surviving means Rex would not have a chance.

[34R]

Sharp actually said "two WELL managed airlines"

Take that to mean what you want it to.....

[MickG0105]

Remember, VB was hemorrhaging before the AN collapse-
Was it? For for the seven-month trading period to 31 March 2001 they had a small operating profit of about half a million on lightish turnover. Their first year result looked bad because they elected to write-down the entire $10+ million in start-up costs in one hit rather than amortising it. They weren't shooting the lights out but I wouldn't say that they were haemorrhaging.

[industry insider]

MickG0105

If they can raise $30 million against their fleet now why wasn't that undertaken right off the bat in the same fashion that Qantas managed their initial capital raising.

Honestly, it would be hard to find an aircraft lessor to buy and leaseback 25-30 year old high time high cycle Saab 340s which are worth around $700k each.

[Goat Whisperer]

What if Rex knows the only chance of this operation succeeding is taking the 2nd airline position, not 3rd, and they're just preparing for the possibility of a future with no VA. Virgin has commitments to serve many more routes than the triangle, none of them as profitable. It is likely that the Queensland government's money is contingent on Virgin 2.0 serving many of the regional markets that Virgin 1.0 did, markets that just aren't as profitable as the triangle. Unless you have a monopoly.

[MickG0105]

MickG0105
Honestly, it would be hard to find an aircraft lessor to buy and leaseback 25-30 year old high time high cycle Saab 340s which are worth around $700k each.
You would think so, wouldn't you? But in yesterday's ASX release Rex said that they had

​​​​​​... lessors willing to provide $AUD30 million for 15 of Rex's fleet of 60 unencumbered Saab 340 aircraft ...
​​​​​​​
The only way I can see that working is that if the lease-back is way above market or it's the same lessor that's going to provide them with their fleet of NBs and they're doing a little swings and roundabouts accounting.

[B772]

HaHa. REX has no interest in operating traditional Airbus or Boeing aircraft. Sim to be located in SYD and provided at no expense to REX.

[Arnold E]

Huh? what are they going to use then ??

[Tubman601]

They’ve been talking to Airbus so possibly A220-300

[Bug Smasher Smasher]

Huh? what are they going to use then ??
Or perhaps this (https://www.mitsubishiaircraft.com/spacejet)?

[Turnleft080]

An A220 has 3/2 seating config just like the DC-9/717 was in Europe 2 years ago was hoping to fly on one with Swiss
though got a mini A319. Air Baltic A220 came over for some demo flights late last year so I wonder that raised their eyebrows.ICF currently sees market values for the 2018 year of build A220-100 and -300 aircraft at $33.9 million and $36.7 million respectively and typical lease rates at $245,000 and $285,000 per month for new-build A220-100 and -300 aircraft.

Editor’s Note: The post was originally published in October 2018.

[B772]

Arnold E. The key word in my posting was traditional ......

Bug Smasher Smasher. The SpaceJet is too heavy and years away from certification.

[RickNRoll]

This is great news!
With the loss of irrational behaviour in the duopoly from VA and Qantas, someone had to pick up the baton.
Enter Rex.
QF alone will swamp the market with cheap seats.
VA will have to follow suit to keep market share.
More jobs for all!

Cheap flights to Canberra.:ok:

[onedottoolow]

RexJet = EJet

[exfocx]

"​​​​​​... lessors willing to provide $AUD30 million for 15 of Rex's fleet of 60 unencumbered Saab 340 aircraft ..."

I think you may have stumbled across someone's cunning plan. If what someone else said is correct ( value 700k each) and they get financing for 30m, what's the likelihood that the financing is done via a tax haven and the inflated lease costs are sucking up a large slab of any profit tax free.

[catseye]

er Yep to the jungle jet
!

[MickG0105]

"​​​​​​... lessors willing to provide $AUD30 million for 15 of Rex's fleet of 60 unencumbered Saab 340 aircraft ..."

I think you may have stumbled across someone's cunning plan. If what someone else said is correct ( value 700k each) and they get financing for 30m, what's the likelihood that the financing is done via a tax haven and the inflated lease costs are sucking up a large slab of any profit tax free.
There is something decidedly odd going on there, let's just put it that way.

[CargoOne]

There is something decidedly odd going on there, let's just put it that way.

There is nothing odd. To start with, stop mixing up Australian and US dollars. AUD 30m is just USD 20m. Second, Saab340B/B+ in serviceable condition depending of the engine status is valued in between 1,2 to 2,0m USD. Thirdly it is not that much Saab airplanes valued as collateral but rather a chance to loan to someone with a strong record (save for covid).

[On eyre]

That inference reflects directly on Sharp’s own managerial “expertise”. He was employed in the Virgin group for 7years alongside Borghetti, until Scurrah got rid of him in May 2019. Initially he was CEO of Tiger and later a group executive, Chief Operating Officer,

Not too “Sharp” are you ?

[Arnold E]

So Tangan, your saying that Mr Sharp has only been at REX for half a dog watch ??

[The Bullwinkle]

That inference reflects directly on Sharp’s own managerial “expertise”. He was employed in the Virgin group for 7years alongside Borghetti, until Scurrah got rid of him in May 2019. Initially he was CEO of Tiger and later a group executive, Chief Operating Officer,
I think you’re getting your Sharps mixed up!

[MickG0105]

That inference reflects directly on Sharp’s own managerial “expertise”. He was employed in the Virgin group for 7years alongside Borghetti, until Scurrah got rid of him in May 2019. Initially he was CEO of Tiger and later a group executive, Chief Operating Officer,
John Sharp has never worked for Virgin. He's a former politician - left politics in 1998, has been tied up with Rex as their Deputy Chair since 2005.

[brokenagain]

That inference reflects directly on Sharp’s own managerial “expertise”. He was employed in the Virgin group for 7years alongside Borghetti, until Scurrah got rid of him in May 2019. Initially he was CEO of Tiger and later a group executive, Chief Operating Officer,

I think you’re getting your John’s and Rob’s mixed up! :ok:

[Tangan]

Yes, I did get my Sharps mixed up. :\

[exfocx]

There is nothing odd. To start with, stop mixing up Australian and US dollars. AUD 30m is just USD 20m. Second, Saab340B/B+ in serviceable condition depending of the engine status is valued in between 1,2 to 2,0m USD. Thirdly it is not that much Saab airplanes valued as collateral but rather a chance to loan to someone with a strong record (save for covid).

Can you provide some evidence for those values you quote. Mate flying regional jets reckons F100 / Bae are only worth around the 1m mark, so how does a 34 seater, which is around the same vintage come anywhere near the 2m USD mark?

Re the bolded sentence. It's a sell / lease back isn't it? So buy a/c with limited market demand and get their return via lease costs. You'd want a high return to justify the risk. The "lendee" then uses that money to enter a highly competitive RPT environment against established players; what could go wrong! I also think that the argument about the flow on from Rex's regional services is way overstated. Not saying it won't work, but it will be bloody difficult to pull off. I'd put my money on Bain & QF, not Rex. Not saying it will fold, just doubt it'll be that successful.

[Mumbai Merlin]

The Virgin ATR's?
Hevilift Australia - operate one or more, established operator, AOC, if time are quiet could always move one or more to PNG, where they are an experienced ATR operator, albeit different model.
Regional Express - would need to upgrade the AOC to high capacity or comply with new Reg coming in around December. Plenty of experienced flight crew to assist with T&C qualifications. Would need access to SIM
Qantas - Never, they have a very successful Dash 8 operation, don't need another type in the fleet 80 knots slower than a dash 8-400. Would need access to SIM
Sharp Airlines - possible contender, very astute businessman, could run a nice Adelaide, Mt Gambier, Portland, Warnambool, Melbourne, Canberra, Sydney scenario. Would need access to SIM
Pionair - too much on their hands with Kiribati E190, SIM required
New start up operator - Not likely, CASA has advised that the new Regs and December workload make this impossible before mid next year. Would need access to SIM

Not sure where the closest or most practical ATR Simulator is but Covid will make travel impossible unless in Australia.

..

[Ladloy]

https://www.aircraftcostcalculator.com/AircraftOperatingCosts/60/Saab+SF+340

[Goat Whisperer]

There's an ATR -600 sim in Brisbane.

[Gin Jockey]

Does anyone remember the Qantas response after 9/11 to Virgin Blue and Impulse? I do. They bought a whole lot of ex BA 767s and flew a whole bunch of the them on top of there existing fleet for years and stitched up two thirds or more of the SY-MEL-BN market in no time.

Er, the leased BA 767s all arrived in mid to late 2000.

[Oriana]

REX/ATR MEMORANDUM OF UNDERSTANDING (https://www.aviationpros.com/aircraft/commercial-airline/press-release/21144109/atr-atr-and-rex-cooperating-on-fleet-modernization)

Could be REX playing the marker, but ATR seem reasonably convinced.

[exfocx]

https://www.aircraftcostcalculator.com/AircraftOperatingCosts/60/Saab+SF+340


Yeah nah! F100 / RJ85 (no RJ100 info) is 6.5m & 7.0m. So my guess is the 2 odd m quote for the saab is rubbish. You won't pay anywhere near the figures they quote for the f100 / RJ.

[aviation_enthus]

Yeah nah! F100 / RJ85 (no RJ100 info) is 6.5m & 7.0m. So my guess is the 2 odd m quote for the saab is rubbish. You won't pay anywhere near the figures they quote for the f100 / RJ.

A quick search on controller.com should help you correlate your mates figures...

All in AUD:
$4-5 million for a Dash 8-100
$300,000 for a Jetstream 31
$1-1.2 million for a Jetstream 32
$1.6 million for a Jetstream 41
$950,000 AUD for a Metro III

So given the above, $2 million AUD for a SAAB seems reasonable to me. The bank has 60 to choose from, you can bet they didn’t pick the oldest airframes. They’ll have finance over the newest and lowest flight time examples.

Alliance got an amazing deal when they bought 21 Fokkers for $15 million USD. But I’d argue that was back when the Fokker wasn’t in such high demand. I’ll bet you couldn’t buy one today for anything like $1M....

[airdualbleedfault]

2 Mill for a clapped out Saab?? You should be selling used cars champ :ok: You may want to ask someone from Network or Alliance about the 7 mill F100s, I'm sure either of them would sell you their entire fleet for less than 5 mill each.
Priceless :}

[Turbine27]

Use newfound Government funds to make a down payment?
High Capacity & Jet AoCs-check.
Engineering-Check
Politicians and regional Australia happy-Check
Closer to Singapore/Asian markets/outlook for further expansion-Check
Get rid of old Braz etc.-Check
Get Airbus/ATR to finance whole fleet deal. ATRs/E-Jets-Check

Just a few thoughts.

[Ex747]

Rumour has it there might be something on jobs with Rex in the aviation section of tomorrow's Australian newspaper.

[nefarious1]

What’s a “jet” AOC????

[jetter55]

Quick search online finds a 1990 F100 for sale for 1,650,000 USD approx 2.4 mill AUD.

Considering multiple 737-300 are advertised online for around 3.5 to 4 mill AUD, one would assume F100s are generally worth less than this.

[Turbine27]

What’s a “jet” AOC????

Oh, here we go.

Ok. I'll bite Nefarious. I'll answer in 1-2 sentences so you can follow it.

I think most with a professional aviation background would follow the points made in the post.

Perhaps you should really be putting your efforts in at school holiday time on studying. Once this COVID thing is over with you'll need to sit some exams and your essays will need to be more than 25 words or less. Best of luck with that BTW.

[normanton]

https://australianaviation.com.au/2020/07/qantas-under-fire-over-predatory-sydney-orange-route/

And as predicted, the whinging has started.

Talk about having your cake and eating it too.

What did you think would happen Rex when you come after the golden triangle?

Whinging all the way to the government as usual. If you can expand $30m into jets, I guess you could say you don’t need government subsidy either! Muppets!!!!!

[Colonel_Klink]

How does the Australian Aviation journalist publish that article without questioning the hypocrisy of what Rex are doing?

This Rex ‘media release’ should never have seen the light of day....

[ozbiggles]

The thing is Rex will get its way, it has conclusively proven it is driving government policy when it comes to government funding to the sector. Having the temerity to put out a whinge like that means they don’t fear any repercussions.

[cloudsurfng]

Rex are a disgrace. Do they have sole rights to the route? No. So they are after their own monopoly. Australia wanted competition, it has it. Quit whinging. Things a bit different now the shoe is on the other foot isn’t Sharp.

[Arnold E]

I cant believe how anti REX people are on here, actually anti everybody unless its QANTAS, I would say most if not all REX employees are really happy that the senior management are trying to protect their jobs. Lets not forget if REX ceases to exist then there will be a heap of pilots,engineers, hosties, groundies and office wallers looking to replace you in your job. Chee.....

[ozbiggles]

Arnold I’m pretty sure most of us want to see a thriving Rex as the ‘service’ it provides are necessary for Australia. Were people are getting quite rightly Poppa Oscar is they seem to have no problem crying poor getting massive amounts of money for their size in an effective monopoly market using their obvious political connections. Then they come out and say we can get the money for a 10 jet operation! If they took NO money from the government and then did it fair play to them. At the moment they have a National party muppet...I mean puppet protecting them and funding them as they do it. There’s your problem.

[Arnold E]

I still dont see it, I for one am glad to see REX management doing EVERYTHING they can to keep going, like any well run business they will use any contacts they have, as would any sensible management, If joyce hasnt got those contacts......tough

[patty50]

It’s only corruption if you’re not in on it

[SandyPalms]

Big fan of corruption Arnold? The problem for REX is that Joyce does have connections. If Sharp keeps poking him in the eye, he with right screw you. One nationals minister won’t be enough to save your Job. Be careful.

[smiling monkey]

It’s not the first time Rex has whinged to the ACCC about Qantas entering their territory.

https://www.abc.net.au/news/2020-02-03/rex-airlines-pulls-flights-from-kangaroo-island-and-ballina/11924260

[Arnold E]

Seems Joyce is "poking " REX in the eye putting a Dash into Orange and losing money doing it. By the way I dont work for REX, i'm retired

[SandyPalms]

How do you know they will lose money? Are you privy to the accounts?

anyway, I’m pleased to se AJ doing everything to ensure the continued employment of QLink employees. Sorry it conflicts with your expectations.

[pilotbm]

How do you know they will lose money? Are you privy to the accounts?

Rex have said they're averaging 40 pax a week total on the route, QF is putting 216 seats a week into the market.
Doesn't take a genius to work out there's not much demand.

[-41]

I still dont see it, I for one am glad to see REX management doing EVERYTHING they can to keep going, like any well run business they will use any contacts they have, as would any sensible management, If joyce hasnt got those contacts......tough

are you actually this delusional, Rex has been gifted more cash than any other company in aviation during Covid.

This is a free market based outcome, and Yet Rex claims free market competition is not permitted?

rex was handed $54 million in a grant tax free- not a loan. This is more than Alliance Airlines before TAX profit for the last financial year, how much more support do we have to give this outfit?

[Arnold E]

Give me a break Sandy

[-41]

Rex have said they're averaging 40 pax a week total on the route, QF is putting 216 seats a week into the market.
Doesn't take a genius to work out there's not much demand.

I doubt Rex would be truthful with their numbers. About as reliable as CCP Covid numbers on actual infections in China, manipulated to suit their needs.

Chairman Lim Kim will be touting Eastern dash drivers as grossly overpaid!

[Arnold E]

While I dont work at REX I know people who do, the numbers are about right, and I cant imagine why Lim Kim would care less what Eastern dash pilots get paid :rolleyes:

[MickG0105]

Rex have said they're averaging 40 pax a week total on the route, QF is putting 216 seats a week into the market.
Doesn't take a genius to work out there's not much demand.
If Rex are only averaging 40 pax a week on Sydney-Orange where are the other 500-750 revenue passengers who fly out of Orange on a weekly basis flying to and who are they flying with? They can't all be on FlyCorporate's twice weeklies to Essendon and Brisbane.

The Bureau of Infrastructure, Transport, Regional Development and Communications passenger activity stats showed that roughly 41,000 commercial RPT passengers flew out of Orange in 2019. The January 2020 numbers were 4,800 for the month or roughly 77 pax each day in each direction.

[SandyPalms]

Corruption and lies. What an upstanding business.

[Arnold E]

Mick, I dont know if you have noticed things are a bit different at the moment (could be a reason for that.... let me think about that for a minute:rolleyes:), nothing is as it was in January.

[normanton]

You are delusional Arnold.

After flying REX (regrettably) twice recently, I can see why they are scared of competition. The product they offer is plain.

If there was competition, I most definitely wouldn't be flying them.

[Arnold E]

Yeah, whatever

[normanton]

Maybe you should go on a cruise ship Arnold? The retired life.

[Arnold E]

I'll be doing just that as soon as it is safe to do that, probably the end of next year

[MickG0105]

Mick, I dont know if you have noticed things are a bit different at the moment (could be a reason for that.... let me think about that for a minute:rolleyes:), nothing is as it was in January.
Thanks Arnold, I had picked up on that. Sydney-Orange is an intrastate route and was accordingly somewhat less impacted by domestic travel restrictions. In April, with the restrictions in full swing, Orange's pax traffic was down by only around 5.5 percent year-on-year. Rex's claim of averaging (over what period is anyone's guess) only 40 pax a week doesn't stand up to scrutiny.

[Arnold E]

I take it you actually work there, as I said i'm retired now but I know people that actually are still there, they are saying the numbers quoted are pretty close if not exactly correct, go figure.

[normanton]

Arnold are you saying you take everything you read from Rex as gospel?

If so, I have some things I would like to sell you. Great opportunity. Once in a life time.

[-41]

There’s no way Rex are quoting the true numbers. Glad to see QF is offering much need competition on these gouged routes. I’ll take the dash.

[MickG0105]

I take it you actually work there, as I said i'm retired now but I know people that actually are still there, they are saying the numbers quoted are pretty close if not exactly correct, go figure.
Even if 40 is correct for whatever average week Rex are quoting (we'll have a better handle on that in a couple of weeks when the May data is released) how does that have a bearing on a competitor's decision to enter the market? This notion that currently 'there's just enough for me, so sod off all other comers' is a combination of errant nonsense and rank arrogance (and stands in stark contrast to Rex's proposed foray into the intra-capital city market).

[Arnold E]

BNEA320, you obviously have difficulty with reading comprehension, I said i'm listening to people actually still working there. What have you got for sale, I'm interested:rolleyes:
-41, its your choice but it wouldn't be the first time Q has put a Dash in a route and then pulled it later,

As I have said I dont understand all the negative Nellie stuff about REX, they are well managed and there still here

[Turnleft080]

Seems Joyce is "poking " REX in the eye putting a Dash into Orange and losing money doing it. By the way I dont work for REX, i'm retired

AJ is just testing the waters and will continue to poke Rex in the eye to a point where Senator Rex will need to pull out the cheque book one more time.
While he scribbles, Not Negotiable, AJ will say "while your at it yes please". AJ is chalking the cue to play a snookering shot.

[Boeingpilot738]

BNEA320, you obviously have difficulty with reading comprehension, I said i'm listening to people actually still working there. What have you got for sale, I'm interested:rolleyes:
-41, its your choice but it wouldn't be the first time Q has put a Dash in a route and then pulled it later,

As I have said I dont understand all the negative Nellie stuff about REX, they are well managed and there still here

And why is that they’re still there? They were going broke 3 months ago, now they’re expanding. It doesn’t take a genius to work out why people are questioning the outburst about the Orange-Sydney route. Especially given the scheme that they were given the cash under was meant to be used as a last resort.

[Arnold E]

Mick, I suggested that the route to Orange was not profitable so why would Q put a Dash in there? when Joyce claims q is bleeding cash at the rate of $40m a week? Q has not operated into there before, so with reduced passenger numbers there is no way either of them can make a profit from that route at this moment in time so whats the game? is it so QANTAS can bleed even more noney (their claim not mine) so that they can get a hand out as well. I have no problem if they get a handout as long as its not used to get rid of competition. And before you say it, Q didn't go to Orange before .

[ozbiggles]

As Rex try to get rid of competition (VA) by embarking on a 10 jet golden triangle operation after crying wolf?

It is kind of an unwritten rule I thinking the expectation is you don’t just take cream off the top on the triangle. I think Rex are about to find out how much it hurts when you bite the hand that feeds you. As has been been pointed out from going bankrupt to bank rolling a 10 jet operation on startup it has made the transport minister look like the goose he is.

[Arnold E]

Ok, you blokes win but one final question, what's the call signs of the jets that REX has got?

[MickG0105]

Mick, I suggested that the route to Orange was not profitable so why would Q put a Dash in there? when Joyce claims q is bleeding cash at the rate of $40m a week? Q has not operated into there before, so with reduced passenger numbers there is no way either of them can make a profit from that route at this moment in time so whats the game? is it so QANTAS can bleed even more noney (their claim not mine) so that they can get a hand out as well. I have no problem if they get a handout as long as its not used to get rid of competition. And before you say it, Q didn't go to Orange before .
In February Qantas announced that they were going to commence a Sydney-Orange service in May.

COVID-19 intervened. They're now starting in two weeks time using Q200s presumably in the expectation that demand will rebound to pre-coronavirus levels.

You're suggesting that the route won't be profitable for QF, their planners disagree, they clearly believed back in February that the service was feasible. We'll have to wait and see.

[ozbiggles]

I imagine jet one will be call sign McCormack, number 2 John Sharp.

[chookcooker]

cronyjet .

[Turnleft080]

SYD APP G/day RooCull......

[aviation_enthus]

If Rex are only averaging 40 pax a week on Sydney-Orange where are the other 500-750 revenue passengers who fly out of Orange on a weekly basis flying to and who are they flying with? They can't all be on FlyCorporate's twice weeklies to Essendon and Brisbane.

The Bureau of Infrastructure, Transport, Regional Development and Communications passenger activity stats showed that roughly 41,000 commercial RPT passengers flew out of Orange in 2019. The January 2020 numbers were 4,800 for the month or roughly 77 pax each day in each direction.

77 each way each day....

Do the maths on that and you’ll understand why Rex is upset. QF are taking a route that is most likely mildly profitable for Rex and adding extra capacity. Result? Both airlines will wear a loss until the other gives up, then the people of Orange go back to a monopoly....

I had an explanation but deleted it because most of the comments on here are clearly biased and can’t listen to a reasonable argument (didn’t expect anything less from Pprune TBH).

[aviation_enthus]

For those of you saying Rex is ‘crying wolf’ or ‘having a whinge’...

Despite their issues they’ve managed to build a reasonably successful regional airline covering a lot of routes to small for QF/VA. Look at the last 5-10 years to see how many regional airlines have vanished that covered the same market to find your explanation of why that is a pretty good accomplishment. O’Connor, Vincent’s, Skytrans MK1, Brindabella/Aeropelican, Air South, Macair, the list goes on and on.

A bit of history for all of you.

Back when Rex started services ex TSV under the QLD govt subsidised routes, they decided to add TSV-MKY to their network.

QF responded by dropping fares by 30% and increasing capacity by 30-40%. They actually had to reduce services to other monopoly destinations to do this (Horn Island and Weipa). Rex lasted 9 months under these conditions before giving up. So the residents of NQ (Weipa/Horn Island) had to suffer under reduced frequency and higher fares while QF snuffed our a competitor somewhere else. PLUS the residents of TSV and MKY got cheap fares for a limited time, then back to high fares for you!!

Reality is both sides will take advantage of their respective strengths at various points in time.

QF have a history of ‘poaching’ profitable regional routes once another operator has done the hard work and built it up. Airnorth has expressed this exact concern about the DN-TSV route. Macair had QF move in on the TSV-ISA route. I’m sure there’s more than that.

Rex meanwhile know what it takes to run a regional network with slim margins. The regular news articles about their issues with regional councils have a lot of merit. Yes Rex seem to be aggressive but airport charges have a direct effect on the fares the passengers pay. I have heard of these issues playing out (through workmates that are dealing directly with councils) and some of the things the councils try to pull shows the massive lack of understanding in many regional councils.

Rex are not perfect by any measure, but they know their market and what it takes to work. I’d like to see all the armchair critics on here build a company that looks anything like that.

[Arnold E]

Glad there is at least one other person that doesn't just go into REX bashing mode

[On eyre]

It’s pretty simple really - Rex can dish it out but can’t take it.

[Bodie1]

Cool story, but if you're gunna 'give' Rex 10's of millions, how bout giving it to Virgin & QF?

[neville_nobody]

QF have a history of ‘poaching’ profitable regional routes once another operator has done the hard work and built it up.

Please stop using that word. It shows such an self entitled mentality that obviously runs through the entire business. By definition no one can poach pilots or air routes in Australia it is impossible. For something to be poached you have to have ownership. If a Pilot wants to resign and go to a operator that pays a higher salary it is not poaching. Same with air routes. If QF want to fly anywhere that is not regulated they can do that. It is not poaching.

[ozbiggles]

No body I think has anything against Rex doing its thing in the bush. It is a hard market but they seem to keep on going, well done to them. The issue which keeps falling on deaf ears to the faithful few here is that they cried they were going to go bankrupt, got a large proportion of government assistance and THEN said yeah we can get enough money for 10 jets and the infrastructure to do the triangle which will cost more than the entire Rex organisation now. That is where issue is. If they give all the TAXPAYERS money back and still do it, well hats of to them.

[Arnold E]

So QANTAS and Jetstar are not getting any direct subsidies? (taxpayer dollars)

[ozbiggles]

Sighs deeply...Qantas,Jetstar and VA are not expanding but retrenching 1000s. They are not buying additional aircraft, Rex is talking about 10 jets probably one jet is worth what the cost of the clapped out 340 fleet is.

[SandyPalms]

As far as I'm aware, the government minimum network for capital city ops has stopped. Regional is different and ends at the end of September. Arnold, REX is proposing to use the government subsidy to start another airline (for want of a better definition) after crying poor and telling the whole country they were going to go broke. That was, and still is a LIE.
QF and JQ are just doing what they did before covid. Nothing more, but certainly less. And now REX has insisted that the government strip them of any subsidy because they have the gall to fly a previously monopolised route. Personally, I think it will make it worse, the subsidies stop in a couple of months anyway and AJ is ruthless.
I for one don't believe for a second they will actually press ahead with the jet ops, they know it would be suicide, but that's not the point at the moment.

[Australopithecus]

SYD APP G/day RooCull......

I think you misheard the future calling. The actual callsign is “RoadKill”

[ship to shore]

Rex also have a history of discount community fares to towns like BWT a route that they have the monopoly on.

[aviation_enthus]

Please stop using that word. It shows such an self entitled mentality that obviously runs through the entire business. By definition no one can poach pilots or air routes in Australia it is impossible. For something to be poached you have to have ownership. If a Pilot wants to resign and go to a operator that pays a higher salary it is not poaching. Same with air routes. If QF want to fly anywhere that is not regulated they can do that. It is not poaching.

Ok if that word offends you I’ll stop using it. My point was a smaller airline builds a new or lower passenger route up to the point that it’s profitable for them, then a larger competitor moves in and takes over. Feel better now?

You can argue ‘that’s competition’ and hopefully it gives a better outcome for the consumer. But it can also be highly anti competitive, stopping a smaller competitor from growing to the point they pose a serious threat. The Tech giants (FB/Apple/Google) have all been accused of similar anti competitive actions in that market.

Also RE: the other comments. ‘Rex will go bankrupt’. They weren’t wrong and without government assistance they would have. Doesn’t take a genius to look around the world and realise that the airlines without government support are unlikely to survive.

Rex also said ‘we won’t transport COVID tests’. Again not wrong. Without government support they would have shut down their network. Can’t carry tests without a network.

Rex also called ‘force majure’ on the QLD network. This is partly subsidised and probably comes with a minimum frequency in the contract. Again if the pax numbers drop and they’re not profitable anymore, why should Rex continue to fly that route?

The government has announced various support packages for the aviation industry.

Domestic Aviation Network Support. $165 million ONLY for VA/QF. Subsidy to operate minimum domestic services.

Regional Aviation Support Network. $198 million to cover minimum services a week across ALL regional RPT networks. $100 million of this is set aside for direct assistance to any regular RPT operator (there are 12 by the way, I’d argue REX is the largest of these 12...).

Australian Airline Financial Relief Package. $715 million which covers Airservices charges. Basically only works if you’re flying. But also gives the most $$ to the operator with the biggest network (probably QF).

There’s also the freight subsidy to ensure food products can get to market overseas.

So QF/VA get access to upto $165 million between them. Rex have to share $98 million between 12 companies (of which they are by far the largest). The direct assistance ($100 million) to regional airlines is arguably crucial to their survival, they’re probably the weakest financially vs the majors.

I’m going to take a guess and say if no assistance had been offered by the Federal Govt, Rex would have shutdown their entire network and pushed all their staff on to JobKeeper. They own almost all the Saab’s outright and had a reasonable cash reserve. So they could have held on for a while. Maybe they could have also refinanced some for $30 million in cash to keep going. This would have resulted in a far weaker company at the end of COVID. Plus the other 11 regional RPT airlines would have also been under significant stress, most likely some would have gone under.

The assistance packages are definitely ‘tailored’ towards different parts of the industry. But so they should be. QF made $1 billion profit, they have substantial assets to survive with and a dominant market position. VA were screwed before all this began. Regional airlines run older aircraft with thin margins and lower passenger numbers. They have less ‘room to manoeuvre’ given the current conditions.

Remember ALL airlines have access to JobKeeper to at least retain their employees. How they’ve organised all their other assets (cash/aircraft/etc) will determine how they survive this crisis.

[aviation_enthus]

DANS continues to 30th September.
RANS continues to 31st December

https://minister.infrastructure.gov.au/mccormack/media-release/government-support-continues-australias-aviation-industry-0

Quote from a late March media release:
(note the continuing to work with industry, this isn’t over yet folks, Victoria this week is a perfect reminder)

“Currently there are around 12 commercial regional airlines – aside from the Virgin Australia and Qantas groups – which operate regular scheduled passenger services across Australia. While the $198 million to support the network will assist airlines, there are critical standing costs for each airline’s safety function, regulatory compliance and minimum operational capability to be met.

An additional $100 million is available to provide direct financial support to smaller regional airlines during this unprecedented downturn in aviation activity should it be needed.

Airlines, contracted aero-medical providers and a range of other essential service providers can apply for consideration and subject to financial analysis, be eligible for assistance on a month-by-month basis through to 30 September 2020, where there is a demonstrated need.

The Government recognises all areas of the aviation industry are feeling the impacts of the current COVID-19 crisis. While the $100 million package is directed at smaller regional airlines, the Government is continuing to work with the larger stakeholders such as Qantas and Virgin Australia groups and it has already announced industry-wide support through a $715 million package of assistance last week.”

[aviation_enthus]

Sighs deeply...Qantas,Jetstar and VA are not expanding but retrenching 1000s. They are not buying additional aircraft, Rex is talking about 10 jets probably one jet is worth what the cost of the clapped out 340 fleet is.

And why is that??

QF have a large international network (I think around 25% of their revenue). None of that flying will be returning any time soon. Plus it looks like the market will be smaller when it does. So they have to make people redundant simply cause they don’t need them anymore.

VA has been badly managed for the last 5-10 years. That aside, they also have international ops, so I’d argue even if they were in a better position financially, they’d still be making staff redundant.

Air NZ is the same. The domestic network may return to 80% capacity but the rest won’t = redundancies.

I’ll bet if Rex had international they’d be doing the same..... In fact there’s nothing to say they won’t have to make staff redundant in the future.

[Arnold E]

Ozbiggles, (sighs deeply) you do realize of course that MOST of REX staff are stood down on jobkeeper, dont know what will happen in September, no different than the other airlines

[ozbiggles]

We know only one of those airlines is talking about a multimillion dollar EXPANSION after receiving TAXPAYERS funds, the rest are DOWNSIZING, including their domestic fleets.

[MickG0105]

77 each way each day.... Do the maths on that and you’ll understand why Rex is upset. QF are taking a route that is most likely mildly profitable for Rex and adding extra capacity.
So more demand than two full 340s/Q200s each day, seven days a week and that route is only 'likely mildly profitable'? Rex only fly that route 5 days a week. If they're not hauling in cash off that route they need a new revenue management system.

... Result? Both airlines will wear a loss until the other gives up, then the people of Orange go back to a monopoly....

So this is always the bit of the Rex argument that's always interesting. Apparently monopoly routes are bad ... unless it's Rex that has the monopoly.


I had an explanation but deleted it because most of the comments on here are clearly biased and can’t listen to a reasonable argument (didn’t expect anything less from Pprune TBH).
I don't have a problem with Rex per se, but I do have a problem with poor and hypocritical arguments.


​​​​​​​​​​​​

[aviation_enthus]

So more demand than two full 340s/Q200s each day, seven days a week and that route is only 'likely mildly profitable'? Rex only fly that route 5 days a week. If they're not hauling in cash off that route they need a new revenue management system.


So this is always the bit of the Rex argument that's always interesting. Apparently monopoly routes are bad ... unless it's Rex that has the monopoly.


I don't have a problem with Rex per se, but I do have a problem with poor and hypocritical arguments.


​​​​​

Ok I’ll help.

77 passengers each way every day of the week.

Rex (Pre Covid) ran 3-4 services a day to Sydney. Fly Corporate ran limited services to MEL/BNE.

77 x 2 = 154 pax
154 x 7 = 1078 per week
minus fly corporate (say 15-20 per flight x 4 sectors) = 1010
Across 6-8 individual Rex sectors daily: 1010/48 sectors = 21 pax average per sector on Rex

34 seat Saab, 21 pax = 61% load factor. I think their average across the whole network is the high 50’s, so hardly ‘profit gouging’.

If QF want to offer a reasonable schedule, they’ll have to go 2x daily Monday to Friday. That’s an extra 20 sectors a week.

Lets assume the market grows by 20%. 1010 pax becomes 1200/week. Divide that by 68 sectors and now you get 17 pax per sector. If it doesn’t grow now we’re looking at 14 pax per sector.

So like I said both companies wear a loss until one pulls out. Back to monopoly.

I never (and I don’t think Rex have either) have said that they don’t want competition. But SOME regional routes WILL NOT SUPPORT competition in the sense of two viable companies. There is simply not enough demand to support two efficient companies. That’s why until recently most of the states restricted competition (yes a monopoly) to the smaller towns.

By all means expose Rex to competition, after all that’s the point of a capitalist economy. But don’t try and tell me this won’t result in the SYD-OAG route going back to a monopoly when one carrier pulls out. That’s the point I’m making.

[MickG0105]

Ok I’ll help.

77 passengers each way every day of the week.

Rex (Pre Covid) ran 3-4 services a day to Sydney. Fly Corporate ran limited services to MEL/BNE.

77 x 2 = 154 pax
154 x 7 = 1078 per week
minus fly corporate (say 15-20 per flight x 4 sectors) = 1010
Across 6-8 individual Rex sectors daily: 1010/48 sectors = 21 pax average per sector on Rex

34 seat Saab, 21 pax = 61% load factor. I think their average across the whole network is the high 50’s, so hardly ‘profit gouging’.

If QF want to offer a reasonable schedule, they’ll have to go 2x daily Monday to Friday. That’s an extra 20 sectors a week.

Lets assume the market grows by 20%. 1010 pax becomes 1200/week. Divide that by 68 sectors and now you get 17 pax per sector. If it doesn’t grow now we’re looking at 14 pax per sector.

So like I said both companies wear a loss until one pulls out. Back to monopoly.

I never (and I don’t think Rex have either) have said that they don’t want competition. But SOME regional routes WILL NOT SUPPORT competition in the sense of two viable companies. There is simply not enough demand to support two efficient companies. That’s why until recently most of the states restricted competition (yes a monopoly) to the smaller towns.

By all means expose Rex to competition, after all that’s the point of a capitalist economy. But don’t try and tell me this won’t result in the SYD-OAG route going back to a monopoly when one carrier pulls out. That’s the point I’m making.
Thanks for the sums. Rex's network load factor is 62.5 percent.

3-4 services a day. It strikes me that would be first thing that would come under review rather than this all-or-nothing approach.

But in any event if we're back to the monopoly route argument then you can surely see the subjectivity problem with arguing that the current monopoly is acceptable (ostensibly because Rex has it) whereas a future monopoly would be unacceptable (ostensibly because Qantas would have it).

[TBM-Legend]

QF flights also have lots of on-carriage vs REX point to point

[-41]

Can’t wait, for a rex NB fleet Competing with QF. 10 Airframes is hardly a threat as we witnessed with the Singapore bankrolled TT Experiment.

[Left 270]

The QF guys questioning the numbers and motives of REX management, that’s cute, terminally cute.

[Ragnor]

I can't wait for REX to complain to government because they haven't been given a fair go on the triangle by QF and VA.

[Australopithecus]

The QF guys questioning the numbers and motives of REX management, that’s cute, terminally cute.

The questions are valid, but posed as a taxpayer. If Rex was able to generate funding for a fleet expansion they certainly didn’t need survival funds from the taxpayer. Someone owes me a couple of bucks.

What Rex does with ten jets, no lounges and second rate terminals is up to them. Except that’s not the end game, is it? I imagine they will shed crocodile tears when it all goes wrong and expect their mate to somehow subsidise their operation for the sake of fairness, competition, the battler, the flag, the whole vibe of thing.

$30 million for a jet operation goes away pretty quickly. Even if Rex had the AOC and admin in place, ten jets would eat that in about ten weeks

[MickG0105]

The questions are valid, but posed as a taxpayer. If Rex was able to generate funding for a fleet expansion they certainly didn’t need survival funds from the taxpayer. Someone owes me a couple of bucks.

That is particularly so when you consider the stated purpose and eligibility criteria for the Regional Airline Funding Assistance grant program.

The objective of this Grant Opportunity is to assist:

domestic commercial airlines operating Regular Public Transport services to regional and remote locations, and
a range of essential services air operators,

with cashflow to assist them maintain essential air links during the COVID-19 period, subject to eligibility and analysis of the organisation’s financial situation. The funding is seen as a ‘last resort’ option when a range of other strategies to manage an airline’s position have been undertaken.
Emphasis on 'last resort'. Clearly Rex had not undertaken the most basic of the 'other strategies' available to them; a capital raising via debt using fleet as security. To the extent that they needed a template for that, they just needed to pick up a newspaper on 25 March and read about what Qantas did.

[rodney rude]

A forum full of dudes with no idea how big businesses are run. Screams of hypocrisy, crocodile tears. Both CEOs are doing exActly what they should be doing, running businesses using any leverage they can to make it work. Pleasing a bunch of unsavvy dudes on pprune isn't taught st business school

[Bodie1]

Nobody likes a whinger, particularly the continual ******* whinge from rex.

[Arnold E]

Ozbiggles, ALL airlines at this stage are receiving taxpayer funds, and at this stage REX has NOT expanded its in the same position as everybody else:rolleyes:

[Australopithecus]

A forum full of dudes with no idea how big businesses are run. Screams of hypocrisy, crocodile tears. Both CEOs are doing exActly what they should be doing, running businesses using any leverage they can to make it work. Pleasing a bunch of unsavvy dudes on pprune isn't taught st business school

I frankly expect (often in vain) any CEO to not try to game the system during a thing like a century pandemic. I certainly expect a cabinet minister to exercise some fiduciary responsibility: another expectation dashed all too often.

[rodney rude]

Austy I could not agree more. The relevant ministers in any situation like this and in any industry need to take advice, and act appropriately and legally with no favouritism and in the country's best interest. But were any of us to be running any of these company's we would also be doing what is needed to ensure the best outcome for our company. And if we did not do that because Normanton or anyone else here might call "whinger"- well that would be very remiss of the CEO charged with keeping his company alive.

[Arnold E]

It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will

[Cessnadriver123]

It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will
Can you actually read the thread properly and the facts that have been pointed out NUMEROUS times

People aren’t complaining about the fact they got a handout.

They are complaining about the fact they cried wolf, got a healthy government handout AND THEN proceeded to raise capital to start a jet operation.

If you can’t see how that differs to someone on jobkeeper, you’ve got rocks in your head.

[Deejaypee]

Arnold, are you actually retired as you say you are in your post #112 or are you still working. At least we do know that you are full of sh*t!

[aviation_enthus]

Arnold, are you actually retired as you say you are in your post #112 or are you still working. At least we do know that you are full of sh*t!

Anything useful to say or are you just here for character assassination?

No relevant facts to support ‘full of s***’.

[SandyPalms]

He did say he was retired. Now he’s not. Without the “character assassination” as you put it, it’s difficult to understand what’s he’s on about. You know what they say about drowning men.

[-41]

It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will
What a Flog - enjoy your retirement

[Arnold E]

Perhaps I should have elaborated, retired from aviation workforce not from the entire workforce.

[Bodie1]

The others won't thank you Arnie, but I will. While you lift, I'll lean. Thanks Champ.

[normanton]

It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will
Because I'm sure no one at Rex is on Jobkeeper either.

[ozbiggles]

Can’t speak for others r but I’m not...which just goes to prove Arnie when you assume you make an ass of yourself. Nice to see your opinion of those who have been forced onto it at the moment.

[Arnold E]

Dont know why your not on jobkeeper Oz but REX guys certainly are, but Norm, you have entirely missed the point of what I was saying.
If by me saying I hope REX does good and and grows has offended any of you, then I sincerely apologize, It has not been my intention to offend anyone.

[normanton]

I'm all for company's expanding and creating more jobs.

But when REX whinges in the face of competition at the drop of a hat (it happens all the time), my tolerance for them goes down the greaser pole.

And whilst crying poor for government hand outs, they then claim expansion through raising capital against the SAAB's. Why didn't they do that before? Qantas did.

Do you see Qantas whinging about REX coming onto the golden triangle? Nope. But Rex can't expect to come onto the golden triangle without Qantas providing some competition on your monopoly routes.

[SandyPalms]

https://australianaviation.com.au/2020/07/rex-qantas-feud-continues-over-sydney-to-orange-route/

[j3pipercub]

How terribly out of character for Rex to cry like toddlers when everything doesn’t go their own way.

[TT738]

I'd be whinging at anything the big red rat does that interferes with your ops. No use complaining after the event.

[cynphil]

Wrong again TT738........it’s a big white rat......at least you’re consistent!

[wheels_down]

Are they able to get any of Tiger’s Sydney slots for these flights?

Tiger had around 20 slot pairs daily for Sydney.

At one point TT were carrying 4000 pax a day between ML and SY. Considerable opportunity once the market picks up again for Rex to nab some.

Alan will try to sink it, as all those 4000 punters will be wanted to help gives some upside to its failed taxpayer funded Avalon experiment. Jetstar never flew Tulla to Sydney before Tiger started it in 2009. They ran about 10 flights a day from Avalon. I would imagine they would be looking at potentially pulling back Tulla and increasing Avalon.

[Andre Meyer]

Did anyone happen to see the article in The Australian (behind a paywall) about Rex buying 10 of Virgin’s 737s?

[Icarus2001]

https://www.afr.com/street-talk/take-off-rex-swoops-on-737s-left-behind-by-virgin-2-0-20200812-p55kuj

Leasing it would appear.

[smiling monkey]

It would be interesting to see if Rex also rehires redundant ex Virgin crews, or whether they'll upgrade their existing turbo-prop pilots. We all know which is the cheaper option, so would they go for the cheaper option, or reward their loyal long serving pilots with a jet transition?

[non_state_actor]

It would be interesting to see if Rex also rehires redundant ex Virgin crews, or whether they'll upgrade their existing turbo-prop pilots. We all know which is the cheaper option, so would they go for the cheaper option, or reward their loyal long serving pilots with a jet transition?

CASA will force them to have a percentage of crew being already experienced on type beyond that it's up to the airline. From what I have witnessed the transition later in life from long term turbo prop experience to a 737 is challenging.

[Mach E Avelli]

From what I have witnessed the transition later in life from long term turbo prop experience to a 737 is challenging.
The "challenge" depends on the individual. I have seen ex Metro drivers ace B737 training and ex A320 drivers struggle with it.
Regardless of any challenge, it's a certainty that Rex will use type rated pilots for every B737 position - both L & R seats - until such time as the supply dries up. There is no industrial or legal impediment to them doing that, and a very strong short term financial incentive to do just that.
No, it's not rewarding loyalty, but we are experiencing the ancient curse of living in 'interesting times' .

[Blueskymine]

CASA will force them to have a percentage of crew being already experienced on type beyond that it's up to the airline. From what I have witnessed the transition later in life from long term turbo prop experience to a 737 is challenging.

If you can fly a Saab under the Rex system, you will fall asleep flying a 737.

[onedottoolow]

It will be the best thing for Rex if the 737 deal goes through. At least those of us here will have the opportunity for progression onto a jet aircraft.

good luck to all

[porch monkey]

How long you been at REX one dot?? Do you actually believe what you wrote?

[Street garbage]

Perhaps I should have elaborated, retired from aviation workforce not from the entire workforce.

Do you think we are on Jobkeeper by choice?
What would happened to the economy if JK was not available, and unemployment at northwards of 20%?
I suggest you take your whining to the Murdoch press editorials...

[MacTrim]

If REX get 737, the last people to fly them will be long termREX Pilots...no malice there, just FACT

[Arnold E]

Not sure I understand what you are on about Street garbage, I definitely have no problem with JK, some of my family are on it, just not me ???

[MelbourneFlyer]

Looks like REX is making a move to pick up some of Virgin's leased B737s which the airline no longer needs, see https://www.executivetraveller.com/news/rex-set-to-swoop-on-virgin-australia-s-unwanted-boeing-737s

I don't suppose that Rex could keep Virgin's seats, in fact they'd probably want to replace them and maybe even extend the 3-3 economy rows through to the former business class cabin and make this an NZ-style premium section with an empty seat in the middle.

[Turnleft080]

Looks like REX is making a move to pick up some of Virgin's leased B737s which the airline no longer needs, see https://www.executivetraveller.com/news/rex-set-to-swoop-on-virgin-australia-s-unwanted-boeing-737s

I don't suppose that Rex could keep Virgin's seats, in fact they'd probably want to replace them and maybe even extend the 3-3 economy rows through to the former business class cabin and make this an NZ-style premium section with an empty seat in the middle.
Amazing how aviation goes around in circles. Just like VB picking up VH-CZQ now rex will pick up some of VAs. If Rex go well, then they go well if they don't, then VA buy out
Rex's 73s for 1 buck then call it Tiger. I'm just thinking circles.

[MickG0105]

Looks like REX is making a move to pick up some of Virgin's leased B737s which the airline no longer needs, see https://www.executivetraveller.com/news/rex-set-to-swoop-on-virgin-australia-s-unwanted-boeing-737s

I don't suppose that Rex could keep Virgin's seats, in fact they'd probably want to replace them and maybe even extend the 3-3 economy rows through to the former business class cabin and make this an NZ-style premium section with an empty seat in the middle.
I'm pretty sure that the only Virgin branded seats are J class, so that would need to be addressed before Rex could use them. I recall Economy X had branding but not Virgin specific - a headrest cover could fix that.

The external paint job would be another matter.

[havick]

Rex becomes the new virgin (at least route network), link (rebranded corporate) becomes the new Rex backfill? Alliance keeps doing their thing and Hoovers up what’s left and profitable for them?

[Street garbage]

Not sure I understand what you are on about Street garbage, I definitely have no problem with JK, some of my family are on it, just not me ???

What did you write this then?

It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will

[Ragnor]

So Rex are planning on starting this in 18 or so months when the borders open back up?

[Icarus2001]

From the original ASX release...

"The Board has confirmed 1 March 2021 as the targeted start date for domestic operations, subject to fund availability and regulatory approval."

It will take that long to vary the AOC, train, paint, and prove.

[Pastor of Muppets]

There’s a bloody smear on the aviation brick wall, just waiting for Rex to bash their head against too.

[Section28- BE]

So Rex are planning on starting this in 18 or so months when the borders open back up?

Well....... does, sound a tad like 6/7x months????

However, 'They'- DO have a 'Sharpie' (no, Not the Felt-Pen variety- the 'Donald', also uses 1x of..... those, at 'a' time, apparently).

Any single thing is Possible- 'Apparently/Allegedly'...!!!!- "just gotta ask" (like, the New-Car shop).......!!!!!

rgds all
Good W/E- & be Well
S28- BE

[Andre Meyer]

I do wonder then, if this happens to be a successful venture whether they’d go as far as offering an MPL in their cadetship?

[Come in spinner]

I hope it happens
as for crewing pick up a few good captains and first officers with experience on a contract maybe three years and start the progression from prop to jet

[Double_Clutch]

Yes please. I am ready to progress from my 152 to the 737.
Where do I send my application? Just finished my internship at McDonalds

[galdian]

Just interesting - one poster postulates that the cost to transition pilots says REX won't upgrade existing crew.
Another poster assumes a done deal that REX WOULD transition existing crew.

Being diametrically opposed only one position can be correct.

Of course if VA2 do get up is there a market for someone like REXJET - or are they just covering the "what if/maybe...." position?

If VA2 doesn't eventuate....anyone's guess for Oz aviation.

Cheers

[havick]

Just interesting - one poster postulates that the cost to transition pilots says REX won't upgrade existing crew.
Another poster assumes a done deal that REX WOULD transition existing crew.

Being diametrically opposed only one position can be correct.

Of course if VA2 do get up is there a market for someone like REXJET - or are they just covering the "what if/maybe...." position?

If VA2 doesn't eventuate....anyone's guess for Oz aviation.

Cheers

Don’t discount public perception of a failed airline.

Passengers may see Rex as more reliable rather than punting their money on Phoenix rising.

[Andre Meyer]

Not saying it is a good thing.

Neither saying it should happen.

It just seems as though it is becoming more common (pre-covid that is). Might just be a European thing that is.

[Ragnor]

August 15th today! Rex even begun the process for getting a jet operation up and running CASA, crew C&T etc? mission launch was March 2021 time is fast running out and where are they going with these jets? ex SY to WG or Broken Hill. unless they plan on operating in QLD until a vaccine is found and the citizens are inoculated so the borders can now be opened.

[Arnold E]

What did you write this then?

It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will
Ahh yes Street garbage, at the time there were a few whinging about REX getting government money for nothing, I was trying to make a point that REX were not alone getting government money. Unfortunately I chose a poor comparison, I admit I am not a literary genius and hence chose poorly. I am a supporter of REX (or in fact any aviation entity getting help) I am a supporter of Jobkeeper, as I said some of my family are on it. I did also post that if I had offended anyone then I was sorry and I apologize. I repeat I was only trying to make a point to the few REX detractors

[Turnleft080]

https://www.executivetraveller.com/
This is the 3rd paragraph.
As previously reported, the aircraft themselves will come from Virgin Australia’s leased fleet and are being sourced through a former Virgin lessor which now finds itself on the long list of creditors owned almost $7 billion by the collapsed airline.Many of Virgin’s Boeing 737 pilots, flight attendants and engineers who face redundancy in the downsized airline are believed to be on Rex’s call sheet, including those previously attached to Virgin’s now-closed New Zealand base.

One door closes one door opens. It feels like they are taking over the tiger market. Four airlines doing the triangle. Interesting aviation year coming up.

[Ragnor]

Good luck to them they will need it. Guess they have all those Mullins from the gov now to get it off the ground.

[1A_Please]

I think I'd ask for my salary in advance!

[gordonfvckingramsay]

So what does REX have to offer that can’t be offered cheaper, better and more affiliated than QF and VA2?

[brokenagain]

So what does REX have to offer that can’t be offered cheaper, better and more affiliated than QF and VA2?

Government backing. :}

[hawk_eye]

So what does REX have to offer that can’t be offered cheaper, better and more affiliated than QF and VA2?

If it is ‘full service’ as they have suggested it would be, I actually can’t see QF or VA being able to do it cheaper than Rex.

You would have to think they would have got a very good price on the aircraft, the pilot EA will be no more than the award, the cabin crew rates won’t be much more than what they pay on the Saab, and they already have infrastructure and ground support in ML and SY.

This will be a pretty lean outfit when it gets going....as to whether or not they can tap into the market without any FF flyer program of significance, any international connections or partners, and not much of an onward domestic network, that all remains to be answered.

[wheels_down]

There is 3000-3500 seats Tiger was filling daily ML-SY. That market share will return eventually. Plus it’s regional connectivity.

Jetstar will probably move it’s Melbourne/Sydney run to Western Sydney also which will further boost any corporate traffic on the route.

[Arnold E]

So what does REX have to offer that can’t be offered cheaper, better and more affiliated than QF and VA2?
Well you wont have $300k Captains and $200k Engineers to start with, so I'd say a lower cost base.

[Ladloy]

Well you wont have $300k Captains and $200k Engineers to start with, so I'd say a lower cost base.
They'll be paid more or less the same as Saab crew.

[Derfred]

And in the current climate that may be achievable. Long enough to get them going.

Let’s see if the required revolving door works for them in the long term..

[wheels_down]

They won’t want the union militants standing them up in 5 years time clashing over below industry pay. Which is why they will probably trade up from the Saab and further boost its cadet scheme. So I don’t expect them to fully crew it in the medium to long term with union members from Tiger or Virgin.

For a new startup everyone hired for the launch to get the regulator approvals is usually gone by the third or fourth year anyway.

It will be interesting to see if they take back past employees.

[Ladloy]

They won’t want the union militants standing them up in 5 years time clashing over below industry pay. Which is why they will probably trade up from the Saab and further boost its cadet scheme. So I don’t expect them to fully crew it in the medium to long term with union members from Tiger or Virgin.

For a new startup everyone hired for the launch to get the regulator approvals is usually gone by the third or fourth year anyway.

It will be interesting to see if they take back past employees.
Rex in its current form has 90%+ Union membership

[blubak]

Well you wont have $300k Captains and $200k Engineers to start with, so I'd say a lower cost base.
200k engineers!,where is that the base pay rate for an engineer?
For an engineer who is even somewhere near the top of the pay system the base is around 50% of that.
Maybe you forget that airlines operate 7 days a week but of course anyone who works at the weekend should not be entitled to any extra for that?...Just asking.

[Left 270]

200k engineers!,where is that the base pay rate for an engineer?
For an engineer who is even somewhere near the top of the pay system the base is around 50% of that.
Maybe you forget that airlines operate 7 days a week but of course anyone who works at the weekend should not be entitled to any extra for that?...Just asking.

I don’t think you’ll find many NB flight crew on a 300k base either Blu.

[Arnold E]

They'll be paid more or less the same as Saab crew.
Pretty much I would say at a guess

[Arnold E]

200k engineers!,where is that the base pay rate for an engineer?
For an engineer who is even somewhere near the top of the pay system the base is around 50% of that.
Maybe you forget that airlines operate 7 days a week but of course anyone who works at the weekend should not be entitled to any extra for that?...Just asking.
Who said anything about base and who said anything about shift work not deserving some kind of compensation?
As a matter of interest, how much does a 5 cat get at QANTAS (on 737's). I can remember talking to a Virgin LAME a couple of years ago and he told me he was getting around $200k a year (all up)

[LostProperty]

Nice to see Rex at least acknowledging the considerable government largesse that they receive.

https://www.brisbanetimes.com.au/business/companies/rex-s-airline-miracle-revenue-grows-thanks-to-government-handouts-20200831-p55r29.html

[MickG0105]

Nice to see Rex at least acknowledging the considerable government largesse that they receive.

https://www.brisbanetimes.com.au/business/companies/rex-s-airline-miracle-revenue-grows-thanks-to-government-handouts-20200831-p55r29.html
The $62 million in grants effectively completely plugged Rex's revenue shortfall. Had Rex not elected to take a $62 million write down (asset impairment "in anticipation of difficult trading conditions in the next two years") they would have booked a $35 million pre-tax profit, up 40 per cent on the previous year.

From the balance sheet and cash flows it looks like Rex might have used $10 million of their own money to support operations but there's no sign of any increased borrowings to sustain themselves. The COVID-19 Regional Airlines Funding Assistance program was meant to be "a ‘last resort’ option when a range of other strategies to manage an airline’s position have been undertaken." (that's a quote from the published guidelines). So, how do you get $54 million in last resort funding when you haven't pursued first and second resorts?

[Section28- BE]

So, how do you get $54 million in last resort funding when you haven't pursued first and second resorts?

'Mick'- seems, it depends on who does the asking.............????

This AFR article from back on the 24th of May, gave it all a run-

AFR Link: https://www.afr.com/rear-window/deputy-pm-saved-rex-from-bankruptcy-20200524-p54vxa (https://www.afr.com/rear-window/deputy-pm-saved-rex-from-bankruptcy-20200524-p54vxa)

rgds
S28- BE

Extract:

-Rear Window

Deputy PM saved Rex from bankruptcy

Joe Aston (https://www.afr.com/by/joe-aston-hveym) Columnist

May 24, 2020 – 11.09pm

Last week on Squawk Box Asia, Regional Express Holdings chairman Lim Kim Hai tried justifying his recent dance moves on Virgin Australia’s grave in light of Rex’s own precarious standing up until its rescue by the federal government.

By way of refresher, Lim had lambasted Virgin’s (https://www.afr.com/rear-window/rex-virgin-animosity-steeped-in-aviation-history-20200512-p54s25) “extremely lax and extremely non-courageous” management and its “dysfunctional” board of directors back on May 7, adding that Rex was “probably the most qualified party in Australia to be able to run an airline like Virgin”. No flies on him.

A week later, Rex’s deputy chairman, John Sharp, announced to this newspaper the planned launch of Rex flights between Australian capital cities using 10 new jet aircraft, failing to first inform its own shareholders (https://www.afr.com/rear-window/rex-pinged-by-asx-for-epic-disclosure-fail-20200521-p54v3q) via the Australian Securities Exchange platform. The new foray, Sharp revealed, will necessitate the issue of $200 million of new Rex shares, a mere 172 per cent of its current $116 million market capitalisation!

CNBC anchor Sri Jegarajah was rightly incredulous. “Mr Lim, with all due respect, you’re calling into question how Virgin Australia was run but Rex was facing bankruptcy in March. How would you characterise your financial health right now and what’s changed since then?”

What’s changed since then is that Rex has been given $67.6 million (https://www.afr.com/companies/transport/rex-received-more-taxpayer-cash-than-qantas-virgin-combined-20200514-p54sty) by Sharp's National Party comrade, Deputy Prime Minister Michael McCormack, a full $53.8 million of that in untied grants, and more than Qantas and Virgin received in Commonwealth relief funding combined. That’s a handout worth 21.3 per cent of Rex’s annual revenues, so the equivalent of giving – not loaning – Virgin $1.2 billion and Qantas $3.8 billion.

Adding insult to injury, McCormack (who is also the Transport Minister and Nationals leader) said on April 2 that “Virgin will also be able to benefit from the $298m package that we put down the other day: $198m for subsidising the 138 routes flown to and from regional centres”. Which was completely false. Virgin did not qualify for a cent of this money.

That same day, McCormack said: “We can’t just pick and select individuals and winners out of this" – words he will be force-fed for the rest of his pitiful career.

Just like Virgin, foreign-owned Rex was going broke. “Even Rex cannot survive the next six months of this global emergency,” its chief operating officer, Neville Howell, pleaded. Even Lim confirmed to CNBC that Rex is only surviving “at least the next six months … thanks to the grant from the government”.

We can’t just pick and select individuals and winners out of this.— Deputy Prime Miinster Michael McCormack

So McCormack told Virgin to find “a market-led solution” but gifted Rex all the cash it needed. Sharp, who just so happens to also be a longstanding National Party official, exalted McCormack’s “meaningful assistance package” designed to “prevent [Rex] from collapsing”. The audacity of the cronyism almost eclipses the cronyism itself.

When Prime Minister Scott Morrison reckoned on April 14, vis-à-vis the aviation sector, that “we haven’t been picking any winners or picking any favourites here”, he cannot have been properly briefed on his deputy’s staggering conduct.

Most galling of all are Rex’s grand (and expensive) growth plans just four weeks after a $67 million taxpayer freebie saved it from bankruptcy. Right now, Rex may be the only airline on earth in expansion mode. The Deputy Prime Muppet emits a resounding silence. Is this what not picking winners looks like?

[MickG0105]

S28, yes, I remember reading that article. You get the impression that Joe Aston may not be a fan of the whole McCormack-Rex tie-up, probably with some justification.

[wheels_down]

28.42 onwards. Interesting claims.

https://youtu.be/Wo1fA1OVamo

[MickG0105]

28.42 onwards. Interesting claims.

https://youtu.be/Wo1fA1OVamo
Interesting that Elizabeth Bryant talks about wanting to bottle Rex's apparent government influence and apply it to Virgin. I suspect that she may have had a go at just that. I've long suspected that at least part of the thinking in Bryant's appointing Paul Scurrah was an anticipation of a Federal Labor government last May.

[wheels_down]

Interesting that Elizabeth Bryant talks about wanting to bottle Rex's apparent government influence and apply it to Virgin. I suspect that she may have had a go at just that. I've long suspected that at least part of the thinking in Bryant's appointing Paul Scurrah was an anticipation of a Federal Labor government last May.
Virgin would have become part government owned had Labor got in. That was very clear in the early day. We had local Labor MPs with associated TV crews begging on the sidewalk at T3 in Melbourne for a bailout.

I can’t even think to imagine that state this country would be in had Labor formed government. Just imagine.

[Ragnor]

Well if the Nationals and Rex are anything to go buy, they would of been well looked after.

[AerialPerspective]

Virgin would have become part government owned had Labor got in. That was very clear in the early day. We had local Labor MPs with associated TV crews begging on the sidewalk at T3 in Melbourne for a bailout.

I can’t even think to imagine that state this country would be in had Labor formed government. Just imagine.

Yeh, just imagine, a PM who wasn't on holiday in Hawaii then lied about coming back straight away and who was so out of touch while people's houses were on fire... a PM who would have acted on the atrocious state of aged care, which Scotty ripped $2B out of when he was Treasurer, we wouldn't have had hundreds of deaths in the aged care facilities, people with wounds with ants in them, malnourished, ill fed and have untrained people beating and tossing elderly around because private enterprise is so good at running things, not to mention a Minister for Aged Care who barely knows the name of his own department, certainly doesn't know anything about aged care or the state of it and would lose his job in any other realm of employment for incompetence...

A government that would have bailed VA out... so it's OK that the LNP bail out ZL but just not VA...

We also wouldn't have had people suiciding over the robodebt non-debts and the Commonwealth dragged into the courts and ordered to abandon the scheme which it characterised as nothing more than extortion... we wouldn't have had a megalomaniac 'Minister for Au Pairs' trying to turn us into a police state by having the military be allowed to spy on citizens, journalists being locked up for doing their jobs even when inquiries prove what they said was right, we wouldn't have had more and more so-called security laws to remove rights for something that is a minuscule threat compared with domestic violence... a destruction of the Superannuation system which is the envy of the world... yeah, just imagine if Labour had won...

What a mess we'd be in...

[AerialPerspective]

Interesting that Elizabeth Bryant talks about wanting to bottle Rex's apparent government influence and apply it to Virgin. I suspect that she may have had a go at just that. I've long suspected that at least part of the thinking in Bryant's appointing Paul Scurrah was an anticipation of a Federal Labor government last May.

I'd like to know why she is even still there... she stood back and appears to have allowed the financial destructiveness of the previous era to continue unabated, overseen the loss of a major shareholder who then turned around and did a codeshare deal with their direct competitor in AU and NZ.

What exactly does a senior manager or board member need to do these days to get fired???????

[Ladloy]

Virgin would have become part government owned had Labor got in. That was very clear in the early day. We had local Labor MPs with associated TV crews begging on the sidewalk at T3 in Melbourne for a bailout.

I can’t even think to imagine that state this country would be in had Labor formed government. Just imagine.
**** knows what the current government is doing. They're tanking on the polls, asking the states to open borders when 80% of the country agree with closures. Scomo has been floundering around doing **** all.

[Ragnor]

Sco Mo floundering? I think you know **** all. He is literally powerless in opening the borders.

80% want them closed? I very much doubt that but I’m keen to see your data on this.

[Ladloy]

Latest newspoll.
https://www.perthnow.com.au/politics/newspoll-labor-and-coalition-deadlocked-on-two-party-preferred-basis-after-a-four-point-turnaround-in-labors-favour-ng-b881652897z
A special poll also showed 80 per cent of Australians support border closures if the health situation demanded it, with Victorians, who remain in stage-four lockdown, the least enthusiastic.

Scomo has started playing party politics again instead of actually leading the country all while knee deep in a crisis. It's floundering.

[Square Bear]

Virgin would have become part government owned had Labor got in.

Would have been interesting really...the Labor party sold Australian Airlines to QANTAS in the 1990's, and started the sale of QANTAS by selling 25% of it to BA in 1993.

AND Aerial you consider that Govt purchasing VA with a debt in excess of $7 BILLION would have been a good idea?

Seeing how Governments run, that would have been a 70 Billion black hole in no time.

And really, even the Labor party (if they had of been in power) would not be that stupid...they are just saying what you want to hear...its called being in opposition and just having thought bubbles, and preaching to people that believe that those in Government are there for the electorates good (hahahahaha...yeah right!!!).

[Derfred]

A special poll also showed 80 per cent of Australians support border closures if the health situation demanded it

Hmm... RTFQ?

If that was the question asked, then that doesn't mean that 80 per cent of Australians support all current state border closures, because it depends on the health situation between the states.... I support the border closures around Vic at present, because the health situation demands it. But I don't support most of the other border closures, because the health situation doesn't demand it. So how would I have answered this question in the poll?

[Ladloy]

Hmm... RTFQ?

If that was the question asked, then that doesn't mean that 80 per cent of Australians support all current state border closures, because it depends on the health situation between the states.... I support the border closures around Vic at present, because the health situation demands it. But I don't support most of the other border closures, because the health situation doesn't demand it. So how would I have answered this question in the poll?

From www.pollbludger.net
UPDATE: The wording to the latter question was, “do you think premiers should have the authority to close their borders or restrict entry of Australians who live in other states”, which drew responses of 80% yes and 18% no. State breakdowns: 76-22 in New South Wales, 74-23 in Victoria, 84-15 in Queensland, 92-5 in South Australia and 91-7 in Western Australia, from respective samples of 475, 371, 311, 119 and 146. The overall sample of the poll was 1507, and it was conducted from Wednesday to Saturday.
Rtfq

[TimmyTee]

Haha Derfred ya nong

[MickG0105]

I don't have a horse in this race but I am struck by the fact that "Do you think premiers should have the authority to close their borders or restrict entry of Australians who live in other states" is a different question to "Do you support the current border closures?" There may be a positive correlation between answers to both questions but that has not been demonstrated.

[TBM-Legend]

Hmm... RTFQ?

If that was the question asked, then that doesn't mean that 80 per cent of Australians support all current state border closures, because it depends on the health situation between the states.... I support the border closures around Vic at present, because the health situation demands it. But I don't support most of the other border closures, because the health situation doesn't demand it. So how would I have answered this question in the poll?
What knowledge does the great unwashed have to make informed judgements and hence respond to a "poll" ?

[DirectAnywhere]

What knowledge does the great unwashed have to make informed judgements and hence respond to a "poll" ?

Define "election".

[De_flieger]

What knowledge does the great unwashed have to make informed judgements and hence respond to a "poll" ?
That lack of knowledge has certainly never stopped anyone on pprune.

[TBM-Legend]

Interesting that Elizabeth Bryant talks about wanting to bottle Rex's apparent government influence and apply it to Virgin. I suspect that she may have had a go at just that. I've long suspected that at least part of the thinking in Bryant's appointing Paul Scurrah was an anticipation of a Federal Labor government last May.


I think you're right about Scurrah. Remember his wife who now resides at EY was Chief of Staff for Premier Anna Bligh and now has a gig through EY consultancy reviewing why the Qld government hires so many consultants! Scurrah's Qld Rail time was not a pattern of success either.

[MickG0105]

I think you're right about Scurrah. Remember his wife who now resides at EY was Chief of Staff for Premier Anna Bligh and now has a gig through EY consultancy reviewing why the Qld government hires so many consultants! Scurrah's Qld Rail time was not a pattern of success either.
I am half expecting that if Labor win the upcoming Queensland election, Paul Scurrah will be in a state government job before the year is out (Tourism and Events Queensland is probably overdue for a new CEO).

[DanV2]

I am half expecting that if Labor win the upcoming Queensland election, Paul Scurrah will be in a state government job before the year is out (Tourism and Events Queensland is probably overdue for a new CEO).

Scurrah was the first (post-Aurzon split) Queensland Rail CEO between 2011 and 2012. Fortunately for him it was years before the 2016 "railfail" happened under his numerous successors in Queensland

[Derfred]

Haha Derfred ya nong

Now that the actual question has been posted, I stand by my response.

Pollee’s were merely asked whether Premiers should have the right to close a border, without any reference to the reason. That the majority voted “yes” doesn’t surprise me in the slightest.

But to claim that the poll indicates that the majority of Australians support all current border closures is a disingenuous mis-use of statistics which is sadly not atypical of politically biased media, or indeed, nongs ;)

[blubak]

Now that the actual question has been posted, I stand by my response.

Pollee’s were merely asked whether Premiers should have the right to close a border, without any reference to the reason. That the majority voted “yes” doesn’t surprise me in the slightest.

But to claim that the poll indicates that the majority of Australians support all current border closures is a disingenuous mis-use of statistics which is sadly not atypical of politically biased media, or indeed, nongs ;)
1500 polled over 3 days!!,Im not even going to bother working out what % of the population 1500 is but if someone wants to go on those stats,well so be it.

[MickG0105]

1500 polled over 3 days!!,Im not even going to bother working out what % of the population 1500 is but if someone wants to go on those stats,well so be it.
Don't fall for the old trap of thinking that 1500 can't possibly be a reasonably representative sample for a population of 25.5 million. Statistically, 1500 is more than sufficient to return results with a 3.5 per cent margin of error at a 99 per cent confidence level. If you're prepared to take your confidence level down to 95 per cent, with the same margin of error, you can get by with roughly half that number of participants.

[Ragnor]

Based on 25M population only 0.006% were surveyed.

[Ladloy]

Don't fall for the old trap of thinking that 1500 can't possibly be a reasonably representative sample for a population of 25.5 million. Statistically, 1500 is more than sufficient to return results with a 3.5 per cent margin of error at a 99 per cent confidence level. If you're prepared to take your confidence level down to 95 per cent, with the same margin of error, you can get by with roughly half that number of participants.
This is correct.

[minigundiplomat]

All in AUD:
$4-5 million for a Dash 8-100
$300,000 for a Jetstream 31
$1-1.2 million for a Jetstream 32
$1.6 million for a Jetstream 41
$950,000 AUD for a Metro III

$4-5m for a DH8-100? tell them they're dreaming. I can stick my Holden Ute on Ebay for $500K but it doesn't mean that's its value.

[timewise]

I see REX advertising today in SEEK for B737 check and training with the option of an 18 month temporary assignment !

[No Idea Either]

Must be a current checkie approved by CASA for 737NG. Rules out all the VA wide body people (most were ex 737 checkies as well) although getting your hands on any of them would be gold. Leaves the VAI checkies only, again IMHO any appointment there would be very beneficial to REX. 18mths contract would be good too, just in time to come back maybe or stay on and try your hand.

[brokenagain]

Leaves the VAI checkies only

And Tiger.

[wheels_down]

Tiger didn’t have any crew NG in Sydney. The 18 month clause will probably lure some from Virgin in Sydney.