REX bidding for Antarctic Ops

[Petropavlovsk]

Today's Australian newspaper (Wed 12th) featured an article about REX bidding for the upgoing renewable Antartic support contract.
Despite posting a $35 million loss for the year.
The Government is seeking a single operator to supply:- a passenger jet, four turbo props capable of ski operations, four helicopters and drones.

[Duck Pilot]

Anyone have a link for the current tender? Doesn’t appear to be in the public domain yet.

[Chronic Snoozer]

It's in response to an RFI. The RFT kicks off in November.

[PoppaJo]

They have not had issues getting funding to supply new aircraft for its other contacts under Pel Air so likely won’t be an issue regardless the current profit situation within Rex. Generally the terms under many of these contracts state new or near new aircraft, significant penalties apply with these contracts if they are not able to complete any flights, be interesting to see where they get Pilots from and the dollars offered.

[TBM-Legend]

They have not had issues getting funding to supply new aircraft for its other contacts under Pel Air so likely won’t be an issue regardless the current profit situation within Rex. Generally the terms under many of these contracts state new or near new aircraft, significant penalties apply with these contracts if they are not able to complete any flights, be interesting to see where they get Pilots from and the dollars offered.

Crews etc - how about the current guys and girls transitioning to Rex IF they win it! Don’t believe the Rex spin just yet

[MickG0105]

https://www.tenders.gov.au/Cn/Show/2962b00d-91f0-671d-6d49-196178db4767

The contract has been worth over $195 million to Skytraders over the past five years. And notably, Skytraders have held the contract for this work since its inception over twenty years ago. They essentially wrote the book for Antarctic flight operations.

Government being government, there will almost certainly be a a requirement for the contractor to hold ISO 9001 accreditation, as a minimum. There may even be an ISO 45001 accreditation requirement in there as well; it would certainly be seen as preferred if it wasn't a mandatory requirement. That will almost certainly mean that Pel-Air will have to be the contracting entity (although I don't think that they hold a 45001, happy to be corrected on that).

Financial stability will be a consideration for sure. And Rex will not be able to get away with "unaudited" results on that front. Ordinary P&L performance can be offset to a certain extent by a solid balance sheet and parent company performance guarantees. Rex may look to tap some of the PAG money in that regard. That said, the current share price of around $1 makes tapping the PAG keg an expensive proposition for Rex; the PAG notes have a conversion price of $1.50 a share, with Rex on the hook for the difference.

I note that Rex's press release on the topic lists Craig Martin as their Antarctic Project Manager. That appears to be the same Craig Martin who was Executive Manager, Regulatory Oversight at CASA prior to being appointed Chief Operating Officer at Coulson Australia a little over a year ago.

[Deano969]

Generally the terms under many of these contracts state new or near new aircraft

I wouldn't think Skytraders fleet of 319s would pass this test

[SIUYA]

Originally Posted by PoppaJo
Generally the terms under many of these contracts state new or near new aircraft

Deano969 said: I wouldn't think Skytraders fleet of 319s would pass this test

What makes you think that REX operates anything that would pass the test either?

[PoppaJo]

The A319s have low cycles and impressive range. They have also proven reliability in recent years, especially the current tail numbers.

The second A319LR that Tiger Singapore had has recently been scrapped. That might have been option for Rex to get but that ship has sailed.

It does appear that Rex is firming up other concrete profitability opportunities within the group, ie government tenders, to prop up other faltering parts.

[On eyre]

If Rex wins the contract will it put the icing on their cake 😳😳

[Deano969]

Deano969 said: I wouldn't think Skytraders fleet of 319s would pass this test

What makes you think that REX operates anything that would pass the test either?

They have nothing in their current fleet to throw at this contract and would need to buy / lease the whole lot as per contractual requirements
That said they do have a few Q400s over at NJE that are relatively young, perhaps they could attach skis to these :ok:

[340drvr]

Just wondering, how many 'single operators' in Australia would be ready to provide airliner, ski-turboprop, and helo ops all together? Coulson, maybe? The US Antarctic operation uses different contractors specializing in the different ops (as well as Air National Guard for ski Hercs), It would be a rare operator to have capabilities in all 3 modes.

[blubak]

I wouldn't think Skytraders fleet of 319s would pass this test
Are skytraders expected to bid to retain work or they out of picture now?

[Petropavlovsk]

I believe it is government policy or correctness to advertise a contract when renewal time is on the horizon. It's a procedure to see what pops out of the "wood work" This leads to new ideas and innovation.

There would be no reason for the contract not to be renewed in Sky Traders favour as they have proven the A319, CASA 212 on skis, bring helicopters into the fold. Kiddies can operate drones, so no issue there.

The existing A319's would be very low time, and low cycle, and providing all performance KPI's have been met; then continue on ........................

[MickG0105]

The current contract with Skytraders runs to December this year. As is not uncommon, an RFI was published well in advance of the retender to get a sense of market interests and capabilities. The relevant RFI was issued at the start of May with a closing date for submissions of 30 June. Form your own views as to why Rex waited till this week to announce that they responded to the RFI.

In related news, the ASX issued Rex a Please Explain for their "Sterling Start to New FY", "Profitable Domestic Operations for September", "Increased Profitability on Rex Domestic Jet Operations", "Increased Profitability", "Increasing Profitability in December" series of announcements that eventually culminated in a "We're in the ****ter to the tune of $30+ million" only a fortnight before the end of the FY. Some concerns about Rex meeting their continuous disclosure obligations apparently. Rex's response (https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02683029) was published on 4 July. A week later we get the North to Alaska South to Antarctica announcement.

Again, form your own views as to timing (but if you're hearing keys jangling, you are not the only one).

[Lead Balloon]

If the current contract expires in December this year, there is no practical possibility of an effective transition to a new contractor by then, even if a contract with a new contractor were signed tomorrow. Alternatives are an extension of the current contract while a proper approach to market process and transition arrangements to a new contractor - if successful - are set up, or a clusterf*ck.

[Wizofoz]

If the current contract expires in December this year, there is no practical possibility of an effective transition to a new contractor by then, even if a contract with a new contractor were signed tomorrow. Alternatives are an extension of the current contract while a proper approach to market process and transition arrangements to a new contractor - if successful - are set up, or a clusterf*ck.

Shades of Amann Aviation and coast-watch...

[Bignose101]

Breaking News... REX have announced their first Antarctic support aircraft would be named 'TITAN 6'

[SIUYA]

As Deano969 has pointed out, REX have nothing in their current fleet ‘…to throw at’ the AAD contract, and will therefore need to acquire one large passenger jet, four turboprops that can operate on skis, and four twin-engine helicopters that can also operate from the Australian icebreaker RSV Nuyina.

Under those circumstances, the 11 July 2023 Media Release issued by REX about its North to Alaska South to Antarctica intentions may have perhaps been a little premature?

Like, about 262 days maybe? :8

[Wizofoz]

Does anyone know how "large" the "large" passenger jet needs to be? Larger than an A319/B737?

[assasin]

No surprises here, John Sharp as we know on the Rex board and is or was also on the board of skytraders. I’m smelling something fishy in this deal.

[MickG0105]

No surprises here, John Sharp as we know on the Rex board and is or was also on the board of skytraders. I’m smelling something fishy in this deal.
Well spotted! He has been previously linked to Skytraders as a "part owner". ASIC company search is down for maintenance presently so can't check that, but if it is the case, there would appear to be a bit of a conflict of interest brewing.

[MickG0105]

No surprises here, John Sharp as we know on the Rex board and is or was also on the board of skytraders. I’m smelling something fishy in this deal.
It looks like Sharpie is no longer associated with Skytraders; he ceased being a director back in June 2013.

[Ladloy]

It looks like Sharpie is no longer associated with Skytraders; he ceased being a director back in June 2013.
Is it just like him ceasing to be a politician in 1998?

I do wonder what a post covid Rex would have looked like if Australia had a Labor government at the time.