REX to transition to ATRs, start domestic jet ops
purview
/ˈpɜːvjuː /
▸ n. formal
1. the scope of the influence or concerns of something.
2. a range of experience or thought
eg This case falls outside the purview of the District Court.
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From the Australian:
Rex’s city foray runs into turbulence
The regional airline wants to take on Qantas and Virgin in the competitive capital city market. So far, many of its planes are running significantly below capacity.''Anyone paid enough to share a copy and paste of this paywall article?
Rex’s city foray runs into turbulence
The regional airline wants to take on Qantas and Virgin in the competitive capital city market. So far, many of its planes are running significantly below capacity.Rex Airlines deputy chairman John Sharp has conceded passenger numbers on its capital city routes – the key to the company’s expansion plans – “aren’t where we want them to be” even as the carrier exits an increasing number of regional destinations.
But Mr Sharp said the company was committed to growing the capital city services, launched in March 2021 with six Boeing 737-800NG aircraft, and was yet to spend half of the $150m of funds invested in the expansion by private equity firm PAG Asia Capital.
Over four days, The Australian monitored passenger levels on 35 of 58 Rex flights between Sydney, Melbourne, Brisbane and the Gold Coast. The analysis shows many of those – tracked Monday to Thursday last week – had few passengers. Twelve, with fewer than 44 passengers, were less than one quarter full. One flight, from Sydney to the Gold Coast, appeared to have fewer than 10 passengers. Only three, two between Sydney and Melbourne and another from Melbourne to Brisbane, had more than 100 passengers.
Mr Sharp, who briefly served as transport minister in the Howard government, disputed some of the figures, and said a focus on just four days was “not an accurate reflection of what can happen in a week”. The airline’s busiest days were Friday to Sunday, Mr Sharp said, adding in that period aircraft were regularly full.
Rex declined a request to provide its own passenger data.
“This doesn’t come as a newsflash to us. We’re obviously aware of it and the numbers aren’t where we want them to be in the middle of the week,” Mr Sharp said of the figures compiled by The Australian. “They’re excellent Friday, Saturday, Sunday and Monday morning. Sometimes it’s difficult to get a flight on the weekends.”
For now, Mr Sharp said, the strong passenger numbers over those days were enough to keep the services – which have a capacity of 176 – flying.
“No one realises just how low cost our operation is yet we offer a full service experience for the passengers with all the things that Qantas offers,” said Mr Sharp.
“The only thing we don’t offer yet is a loyalty program which we will resolve fairly soon.”
“We haven’t touched the second half of the $150m we have available to us from PAG. It’ll take whatever time it takes to build and the domestic market is improving,” he said. “There’s a slow period in the middle of the week and that’s what Qantas and Virgin are also experiencing … reflected in the number of flights they cancel.”
In March, figures compiled by the Bureau of Infrastructure and Transport Research Economics show, the average load factor for all commercial passenger flights between Sydney and Melbourne was 78.4 per cent. It was 72.9 per cent between Brisbane and Sydney and 73.8 per cent between Melbourne and Brisbane.
Rex has high growth aspirations for its capital city network, and has previously said it expected to expand from six 737 aircraft to 14. It intended to fly to all capital cities in 2022, Mr Sharp told an aviation summit late last year.
While the Covid-19 pandemic pushed the aviation sector to the brink of collapse and sent Virgin Australia into administration – Rex has benefited from significant government support. The withdrawal of the Regional Airline Network Support scheme at the end of June, however, has meant Rex will withdraw flights from Sydney to Grafton, Bathurst, Lismore and Ballina – and from Adelaide to Kangaroo Island. The airline has previously announced its intention to stop flying between Melbourne and Albury and Sydney and Canberra.
Rex’s expansion into highly-competitive city routes is being funded by PAG, which has been given two board seats and a 47.6 per cent stake in the airline in return. The six 737 aircraft were previously flown by Virgin Australia, and were secured at a low cost of $60,000 per month at the height of the pandemic. The leasing price will rise to $100,000 in 12 months.
However, many of the scheduled flights monitored last week by The Australian were cancelled. Despite plans to operate nine return flights a day between Sydney and Melbourne – the world’s fifth busiest route – Rex was currently flying just four. The Brisbane to Sydney route is down to return services most days rather than the intended three, and Melbourne to Brisbane is flown just daily midweek, with extra f lights on Monday and Friday.
Peter Harbison, the chairman of market intelligence firm CAPA Centre for Aviation, said the low frequency of Rex flights made it an easy target for the larger airlines.
“Rex is selling seats on price, and the other carriers can easily match them on price at the particular times they fly even though their costs are higher,” he said.
“If you look at Webjet, you’ll see most of (Rex) flights are very carefully matched by Jetstar and Virgin which means they’re not really able to leverage the lower price thing to the extent they need to. As long as they have low frequency that’s a disadvantage.”
Another challenge facing Rex is a lack of brand awareness, Mr Harbison added. With a limited marketing budget, Rex had made little effort to announce its presence in the fiercely competitive domestic market and had no apparent point of difference, he said.
“Rex has got to do something a bit different. They’ve got to get known because very few people know that they fly,” he said. “If you want to get in a nice business class seat, it’s very cheap to fly that way (with Rex) but does anybody know that? You can f ly business class on Rex for a similar price that other airlines charge for economy.”
Mr Sharp said the airline was aware it needed to increase the frequency of flights. “We are bringing in more aircraft as we can get them and getting them is more challenging these days than it was a while ago. It is doable, it just takes longer,” he said. “That’s what we always planned.”
Speaking in February after the airline posted a $36m loss for the six months to December 31 – down from a $10m profit for the same period one year earlier – Mr Sharp said Rex had signed “a number” of large companies and was making inroads into the business market.
According to the figures compiled by The Australian, 12 flights between Sydney and Melbourne were on average only around 39 per cent full. One Tuesday flight from Sydney to Melbourne had fewer than 30 passengers on board. Tickets on those f lights were on sale for $121.
The cost of fuel alone on a one hour Melbourne to Sydney flight is estimated to be around $3800 – assuming Rex has hedged at least a portion of the cost. That does not include airport charges, aircraft lease fees and labour costs.
Tony Webber, a former Qantas chief economist who now lectures at UNSW, said there was a limited time any airline could operate a route with few passengers.
“Their owners won’t let it happen forever,” said Mr Webber. “I would say they probably underestimated the degree of competition in those Golden Triangle sectors. It’s a very aggressive, cutthroat industry, and Qantas especially will be very, very aggressive.”
Rex has repeatedly complained to the Australian Competition and Consumer Commission about Qantas and last week blamed its larger rival’s “predatory action” and “bullying and heartless behaviour” for pulling out of some regional routes. A Qantas spokeswoman said Rex appeared to have no problem investing in major city services, and described the airline’s claims as “far fetched”.
Mr Harbison said competition rules were not designed to protect airlines in the market, but consumers. “You could argue you’ve got Qantas, Jetstar and Virgin … I doubt that you’ll still be seeing $79 fares as often as you are, if Rex went out of the market,” he said.
Last edited by MickG0105; 5th Jun 2022 at 21:04. Reason: Formatting
Not sure about JS’s logic. Yes it’s a bit slower through the mid week period but the morning and evening VA flights through that period, aka business traffic, are absolutely chocka’s. As for the cancellations confirming the same slow period, he’s kidding himself. The only reason VA cancel flights is lack of crew, cabin crew in particular, not loads. That’s my ‘at the coal face’ observation anyway.
Can’t speak for JQ or QF….….
Can’t speak for JQ or QF….….
There's your problem, right there. Assuming that there's any logic at all to anything Sharpie says.
He talks up how busy they are on the weekends yet their own schedules give lie to that. They have fewer flights on Saturdays and Sundays than Thursdays.
He reckons that their flight frequency shortfall is because they don't have enough aircraft. Their utilisation figures give lie to that. Their asset utilisation is a good 25 percent below where it should be. They were operating as many flights back when they only had four aircraft as they are now with six.
He reckons that they are bringing on more aircraft "... as we can get them and getting them is more challenging these days than it was a while ago". Twelve months ago they announced that they "... had signed a Letter of Intent (LOI) with a lessor for the lease of two Boeing 737-800NGs. The two aircraft are expected to arrive in late August, increasing the 737 fleet to eight, and are scheduled to enter service on Rex’s domestic network in September." Those two new jets never materialised.
As usual, he's all over the shop.
He talks up how busy they are on the weekends yet their own schedules give lie to that. They have fewer flights on Saturdays and Sundays than Thursdays.
He reckons that their flight frequency shortfall is because they don't have enough aircraft. Their utilisation figures give lie to that. Their asset utilisation is a good 25 percent below where it should be. They were operating as many flights back when they only had four aircraft as they are now with six.
He reckons that they are bringing on more aircraft "... as we can get them and getting them is more challenging these days than it was a while ago". Twelve months ago they announced that they "... had signed a Letter of Intent (LOI) with a lessor for the lease of two Boeing 737-800NGs. The two aircraft are expected to arrive in late August, increasing the 737 fleet to eight, and are scheduled to enter service on Rex’s domestic network in September." Those two new jets never materialised.
As usual, he's all over the shop.
There's your problem, right there. Assuming that there's any logic at all to anything Sharpie says.
He talks up how busy they are on the weekends yet their own schedules give lie to that. They have fewer flights on Saturdays and Sundays than Thursdays.
He reckons that their flight frequency shortfall is because they don't have enough aircraft. Their utilisation figures give lie to that. Their asset utilisation is a good 25 percent below where it should be. They were operating as many flights back when they only had four aircraft as they are now with six.
He reckons that they are bringing on more aircraft "... as we can get them and getting them is more challenging these days than it was a while ago". Twelve months ago they announced that they "... had signed a Letter of Intent (LOI) with a lessor for the lease of two Boeing 737-800NGs. The two aircraft are expected to arrive in late August, increasing the 737 fleet to eight, and are scheduled to enter service on Rex’s domestic network in September." Those two new jets never materialised.
As usual, he's all over the shop.
He talks up how busy they are on the weekends yet their own schedules give lie to that. They have fewer flights on Saturdays and Sundays than Thursdays.
He reckons that their flight frequency shortfall is because they don't have enough aircraft. Their utilisation figures give lie to that. Their asset utilisation is a good 25 percent below where it should be. They were operating as many flights back when they only had four aircraft as they are now with six.
He reckons that they are bringing on more aircraft "... as we can get them and getting them is more challenging these days than it was a while ago". Twelve months ago they announced that they "... had signed a Letter of Intent (LOI) with a lessor for the lease of two Boeing 737-800NGs. The two aircraft are expected to arrive in late August, increasing the 737 fleet to eight, and are scheduled to enter service on Rex’s domestic network in September." Those two new jets never materialised.
As usual, he's all over the shop.
To all the boys and girls at Rex, hold the line and do not give into the threats made by LKH. He knows the regional arm is the bread winner of the operation, call his bluff and go all in.😉
Rex has released a statement to the ASX which is great for a read.
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Aagh yes, what an announcement. Yet another mealy mouthed statement that was aimed at sinking the knife into AFAP and the pilot group. And interestingly, they couldn’t help mentioning ‘predatory pricing’ plus they had a shot at the AFAP President for being employed by a ‘competition’ airline. What an absolute lowball assault by REX. Just shows how pathetic the CEO and Mr Sharp are. Get these two clowns a tissue box and tell them to cry elsewhere.
I took a historical look at two things this morning - the REX share price chart for the previous 12 months and then the previous 5 years, as outlined on the ASX. Then I looked at the Brent crude oil prices for the past 12 months and then the previous 5 years. What it shows is that REX overall profits are dependant on the oil prices of the day. Oil goes up, REX profits go down. So that brings me back to the question of how well are they doing with hedging their fuel costs? Not too well by the look of the charts. It would seem that they haven’t factored oil prices into their business model very well at all. That has to be attributed to the CEO, Board, and any other financial decision maker in the company. And at $121 per barrel this morning, that’s not good. I noticed that oil has barely been below $100 per barrel since 14 February 2022. Now if they hedged around 80% of their fuel on 20 December 2021 they would be sitting reasonably well at the moment as the price was $70.51 per barrel. But I’m doubting it. The CEO’s vitriol expressed towards the pilot group is tinted with desperation. The executives are deflecting attention from their own mistakes and trying to blame COVID, Pilot salaries, predatory pricing and anything other than their own incompetencies. What’s next - blame 5G, solar flares and a declining whale population for their financial issues?
I took a historical look at two things this morning - the REX share price chart for the previous 12 months and then the previous 5 years, as outlined on the ASX. Then I looked at the Brent crude oil prices for the past 12 months and then the previous 5 years. What it shows is that REX overall profits are dependant on the oil prices of the day. Oil goes up, REX profits go down. So that brings me back to the question of how well are they doing with hedging their fuel costs? Not too well by the look of the charts. It would seem that they haven’t factored oil prices into their business model very well at all. That has to be attributed to the CEO, Board, and any other financial decision maker in the company. And at $121 per barrel this morning, that’s not good. I noticed that oil has barely been below $100 per barrel since 14 February 2022. Now if they hedged around 80% of their fuel on 20 December 2021 they would be sitting reasonably well at the moment as the price was $70.51 per barrel. But I’m doubting it. The CEO’s vitriol expressed towards the pilot group is tinted with desperation. The executives are deflecting attention from their own mistakes and trying to blame COVID, Pilot salaries, predatory pricing and anything other than their own incompetencies. What’s next - blame 5G, solar flares and a declining whale population for their financial issues?
Last edited by Paragraph377; 6th Jun 2022 at 01:56.
Not sure about JS’s logic. Yes it’s a bit slower through the mid week period but the morning and evening VA flights through that period, aka business traffic, are absolutely chocka’s. As for the cancellations confirming the same slow period, he’s kidding himself. The only reason VA cancel flights is lack of crew, cabin crew in particular, not loads. That’s my ‘at the coal face’ observation anyway.
Can’t speak for JQ or QF….….
Can’t speak for JQ or QF….….
Rex’s “build it and they will come” marketing strategy is perplexing. Are they relying on lowest fare results in booking apps? Since, as the article mentions, the majors can just offer discounts around Rex’s schedule they then might only get customers from the overflow market. Low fares are one thing but you would think that no name recognition would be a hurdle for many travellers.
As that definition highlights, purvey is a verb. It is grammatically incorrect to say "not the purvey of the Safety Regulator". Unless you are a graduate of the Marjorie Taylor Greene School of Just Using Words That Sound Similar, the appropriate word to use in that phrase is the noun, purview.
I once read a scholarly paper which was very well researched and convincing, but the author at one point said that: “X research was done under the hospices of the Acme Research Institute”. No dictionary would convince the author that he meant “auspices” rather than palliative care homes.
PRuNe is fertile ground for ‘allot’ of ‘mute points’…
/Drift OFF with my apologies.
Fight the good fight, Rex boys and girls.
That’s the thing, they are not. I go out full and overbooked while they head out next to me with 20.
A low cost carrier with near 20 aircraft exited the lower end of the market yet they are targeting the upper end of the market? Would be like putting a David Jones in Broadmeadows. Targeting a non existent market.
A low cost carrier with near 20 aircraft exited the lower end of the market yet they are targeting the upper end of the market? Would be like putting a David Jones in Broadmeadows. Targeting a non existent market.
I find it amusing how people think that JS has any input into the operation. He is just an old fool with connections to corrupt politicians. Make no mistake ALL communications that go out to the media must get signed off by LKH himself, and all decisions are made from Singapore. He is just a puppet that gets told what to say and when to say it.
The ASX statement is just bizarre.
If Rex had concentrated on their core business of regional operations they would be emerging now from the last two years in a stronger position than ever.
Yet with an expensive and dead in the water domestic operation dragging everything else down, Rex do what they know best and start blaming everyone and everything else including the long suffering Saab pilot group for their own incompetent management decisions.
It’ll be interesting to see exactly what the Rex financial position is when results are released in a couple of months.
Latest article in The Australia this afternoon. Good to see going down the road of PIA.
Rex has accused the pilots union of circulating malicious lies to its members after an application was made to take industrial action over the airline’s latest pay offer.
The Australian Federation of Air Pilots has been in negotiations with Rex since 2018, in an effort to secure a new enterprise agreement for Saab 340 pilots.
According to the AFAP, the latest offer from Rex was the “worst yet” and represented a cut in real-term salary of more than 5 per cent since 2018.
“It does not contain back pay and does not cover CPI over the previous four years,” said an AFAP spokeswoman.
“As a result, Rex pilots have been left with little option than to exercise their lawful right to lodge an application for a protected industrial action ballot with the Fair Work Commission.”
In a bizarre statement to the ASX, Rex chairman Lim Kim Hai said the AFAP had circulated “malicious, misleading and deceptive” correspondence to members in the context of ongoing EBA negotiations.
“It is disappointing that AFAP would manipulate information provided to them during the course of negotiations to seek to achieve its aim,” said Mr Lim.
“It is particularly concerning that AFAP whose president (Louise Pole) is a pilot with the competitor (QantasLink) would take this approach given the significant efforts made by Rex during the pandemic to preserve the jobs of pilots when so many other airlines were terminating theirs.”
The AFAP spokeswoman said they stood by their communications with members and would continue to communicate in “an honest, timely and accurate manner”.
Mr Lim went on to defend Rex’s decision to cut a number of regional routes flown by Saab 340s, when government support for those services ended on June 30.
He said a board meeting last month had resolved to channel any resources from those axed routes into other regional routes with strong passenger numbers and growth potential.
“Rex’s current regional flying is about 90 per cent of pre-Covid levels with passenger numbers equally at about 90 per cent of pre-Covid levels,” Mr Lim said.
“Rex believes that it will be reaching over 100 per cent of pre-Covid levels of regional flying activity at the start of the new financial year as a result of the board’s decision.”
Cuts to regional routes had raised concerns the airline was aiming to prop up its expansion to major city routes, using former Virgin Australia Boeing 737s.
As The Australian reported on Monday, passenger loads on the narrow body jets were worryingly low on many weekday services, which were competing with Qantas, Jetstar and Virgin.
Rex deputy chairman John Sharp insisted the airline was in good shape, and would continue its drive into capital city markets with the help of $150m in funding from PAG Asia Capital.
He said Rex was yet to dip into the second half of the funding, which was provided in return for two board seats and a 47.6 per cent stake in the airline.
The Australian Federation of Air Pilots has been in negotiations with Rex since 2018, in an effort to secure a new enterprise agreement for Saab 340 pilots.
According to the AFAP, the latest offer from Rex was the “worst yet” and represented a cut in real-term salary of more than 5 per cent since 2018.
“It does not contain back pay and does not cover CPI over the previous four years,” said an AFAP spokeswoman.
“As a result, Rex pilots have been left with little option than to exercise their lawful right to lodge an application for a protected industrial action ballot with the Fair Work Commission.”
In a bizarre statement to the ASX, Rex chairman Lim Kim Hai said the AFAP had circulated “malicious, misleading and deceptive” correspondence to members in the context of ongoing EBA negotiations.
“It is disappointing that AFAP would manipulate information provided to them during the course of negotiations to seek to achieve its aim,” said Mr Lim.
“It is particularly concerning that AFAP whose president (Louise Pole) is a pilot with the competitor (QantasLink) would take this approach given the significant efforts made by Rex during the pandemic to preserve the jobs of pilots when so many other airlines were terminating theirs.”
The AFAP spokeswoman said they stood by their communications with members and would continue to communicate in “an honest, timely and accurate manner”.
Mr Lim went on to defend Rex’s decision to cut a number of regional routes flown by Saab 340s, when government support for those services ended on June 30.
He said a board meeting last month had resolved to channel any resources from those axed routes into other regional routes with strong passenger numbers and growth potential.
“Rex’s current regional flying is about 90 per cent of pre-Covid levels with passenger numbers equally at about 90 per cent of pre-Covid levels,” Mr Lim said.
“Rex believes that it will be reaching over 100 per cent of pre-Covid levels of regional flying activity at the start of the new financial year as a result of the board’s decision.”
Cuts to regional routes had raised concerns the airline was aiming to prop up its expansion to major city routes, using former Virgin Australia Boeing 737s.
As The Australian reported on Monday, passenger loads on the narrow body jets were worryingly low on many weekday services, which were competing with Qantas, Jetstar and Virgin.
Rex deputy chairman John Sharp insisted the airline was in good shape, and would continue its drive into capital city markets with the help of $150m in funding from PAG Asia Capital.
He said Rex was yet to dip into the second half of the funding, which was provided in return for two board seats and a 47.6 per cent stake in the airline.
Careful boys n girls doing PIA, you will be branded a bully and trouble maker! No promotions onto the C&T team if thats what your looking for. Speaking from first hand experience.
While the hard working Saab pilots who have weathered stand downs during Covid are once again bullied and threatened by an incompetent management team who have presided over the worst launch of any domestic airline in Australian history, let’s remind everyone what such lack lustre performance gets you as a board member at Rex…
June 2021- John Sharp - 1,600,000 Rex Shares
Ronald Bartsch - 400,000 Rex Shares
Neville Howell - 1,000,000 Rex Shares
James Davis - 400,000 Rex Shares
and the list goes on….
The person/people being spat on in the face certainly isn’t LKH…
June 2021- John Sharp - 1,600,000 Rex Shares
Ronald Bartsch - 400,000 Rex Shares
Neville Howell - 1,000,000 Rex Shares
James Davis - 400,000 Rex Shares
and the list goes on….
The person/people being spat on in the face certainly isn’t LKH…
Australian pilots need to take a stand and push for better terms and conditions that have been eroded through covid. Just look at America, Asia and the Middle East. They’re all looking for pilots.
That solves one mystery for me. I wondered where Ron Bartsch ended up, after his 'thankyou' appointment as a member of the AAT expired. He seemed to me to spend an unusual amount of time writing errata to his AAT decisions.
Keep spreading the fear mate. Let Australian pilot’s conditions languish behind the rest of the world and cost of living just so you can climb the greasy pole to show the rest of your colleagues ‘how it should be done’.
Australian pilots need to take a stand and push for better terms and conditions that have been eroded through covid. Just look at America, Asia and the Middle East. They’re all looking for pilots.
Australian pilots need to take a stand and push for better terms and conditions that have been eroded through covid. Just look at America, Asia and the Middle East. They’re all looking for pilots.