Rex Expanding Into Jets
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There were operational problems with the CRJ at first but that had a lot to do with how they were introduced. No surprises that TJ was a big part of that problem. The early Kendell pilots were set up to fail as they did their endorsement in Canada, their line training in South Africa then were expected to operate to Ansett procedures for their check ride! This time around there won't be any parent company dictating how the operation will be introduced and there will be more than enough experienced pilots to handle the expansion.
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& here we all thought Rex would be flying Essendon/Bankstown.
Rex move makes perfect sense, but could also be a singaporean move to scare off all other bidders. SQ might pick up bits of VA very very cheaply including non-unionised staff
Rex move makes perfect sense, but could also be a singaporean move to scare off all other bidders. SQ might pick up bits of VA very very cheaply including non-unionised staff
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Rex already flies into BNE, SYD, MEL & think there might be a few VA staff looking for jobs, as long as they are prepared to work for less & go non-unionised.
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Rex already flies into BNE, SYD, MEL & think there might be a few VA staff looking for jobs, as long as they are prepared to work for less & go non-unionised.
REX may win the battle but could lose the war. There are a few more costs involved with running jets than just pilot salaries. You could have the cheapest crews but the cost of fuel/airports/catering/enroute charges etc won't change. Also they won't be able to throw a tantrum at major airports about fees like they do in the country either. It will be interesting in how they handle that side of things. Aerobridge access is another thorny issue in Australia. I doubt they would want to be busing up to 360 people every sector
A jet is a jet, and it will always have different operating economics to a turboprop. If you really think “Regional jets might be a better starting point” on routes like MEL-BNE and SYD-PER then I’m not sure you understand the economics of airlines.
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Wonder what Rex would do to retain Virgin frequent flyers ? Offer some sort of deal to velocity trustees, so points could be used on rex jet services ?
Maybe some sort of a % deal or strictly limited ff seat availability initially ?
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$ 200 million won't go far to launch and sustain a "ten aircraft" competitive operation.
What these comments by REX will do is effectively scupper a VAH resurrection, especially in the context of the administrators handling of the insolvency process with unrealistic targets and debt expectations.
What these comments by REX will do is effectively scupper a VAH resurrection, especially in the context of the administrators handling of the insolvency process with unrealistic targets and debt expectations.
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Qantas would smash them. So would Virgin Mk 2 if it gets up. Look at Rex's track record. They move in on someone else's turf like in WA but when Q/link move into there turf such as in SA they chuck a wobbly. Pull out of KI and threaten the same for Whyalla claiming unfair competition. Constantly whining about airport fees etc ,always looking for taxpayer/ratepayer assistance and screw their workforce to boot.
If they went and played with the big boys on trunk routes it would be Compass all over again....I give them 6 months.
However what they may like to consider is smaller jets on their long routes such as Sydney- Broken Hill etc, that might work.
If they went and played with the big boys on trunk routes it would be Compass all over again....I give them 6 months.
However what they may like to consider is smaller jets on their long routes such as Sydney- Broken Hill etc, that might work.
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Loving the commentary on here... 🤦♂️
Personally I’m not surprised. There’s been rumours of this for years BUT the recent Lim Kim comments RE the Virgin Administrators was taken the wrong way by most of you I think. Reading between the lines I thought he was disappointed the administrators weren’t cutting VA down to a smaller size so Rex would buy them.
But looking at it from a practical view (no emotion unlike some):
- already have staff, offices, parking areas, slots in all the capital cities.
- enough redundant 320/737 crew floating around to fill at least initial staff positions (especially training and checking).
- 737/320 lease rates would be low right now and Rex could probably get a better deal than current operators
- fuel is cheap and unlikely to go up in the next 2-3 years
- Rex management has plenty of experience running an airline. Yes no jets but it’s just another aircraft that needs filling. They know revenue management, cost control, maintenance, etc. It’ll be adding to what they do.
- they already have feed from a regional network which may fill +10% of their seats from day 1.
- all indications are that they’d stick to linking BNE/SYD/MEL/ADL/PER. With a small route network covering existing Rex bases, they’ll keep their costs reasonably low.
PLUS it looks like being funded by new equity in Rex via the sharemarket. This means no debt to service, which will keep their costs down significantly.
So given all the above I’d argue their costs may come in close to Jetstar. They certainly won’t be chasing the full service market so that should allow them to make a decent profit out of a small network.
It may just be a shot across the bow to any new operators in Aust, but it does have a very good chance of succeeding.
Personally I’m not surprised. There’s been rumours of this for years BUT the recent Lim Kim comments RE the Virgin Administrators was taken the wrong way by most of you I think. Reading between the lines I thought he was disappointed the administrators weren’t cutting VA down to a smaller size so Rex would buy them.
But looking at it from a practical view (no emotion unlike some):
- already have staff, offices, parking areas, slots in all the capital cities.
- enough redundant 320/737 crew floating around to fill at least initial staff positions (especially training and checking).
- 737/320 lease rates would be low right now and Rex could probably get a better deal than current operators
- fuel is cheap and unlikely to go up in the next 2-3 years
- Rex management has plenty of experience running an airline. Yes no jets but it’s just another aircraft that needs filling. They know revenue management, cost control, maintenance, etc. It’ll be adding to what they do.
- they already have feed from a regional network which may fill +10% of their seats from day 1.
- all indications are that they’d stick to linking BNE/SYD/MEL/ADL/PER. With a small route network covering existing Rex bases, they’ll keep their costs reasonably low.
PLUS it looks like being funded by new equity in Rex via the sharemarket. This means no debt to service, which will keep their costs down significantly.
So given all the above I’d argue their costs may come in close to Jetstar. They certainly won’t be chasing the full service market so that should allow them to make a decent profit out of a small network.
It may just be a shot across the bow to any new operators in Aust, but it does have a very good chance of succeeding.
