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REX to transition to ATRs, start domestic jet ops

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REX to transition to ATRs, start domestic jet ops

Old 30th Oct 2023, 10:56
  #2641 (permalink)  
 
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Originally Posted by markis10
Rex have announced BNE CNS using NJS Dash operations, canít see too many punters rushing to book a three hour prop jet option
There's something like a dozen jet services a day between Brisbane and Cairns so difficult to see how that's going to be competitive. Interesting that they see that option as the best use of what I'm assuming is "spare" Dash availability.
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Old 30th Oct 2023, 11:22
  #2642 (permalink)  
 
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BNE - CNS in a Dash 8? Jet like speed.
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Old 30th Oct 2023, 21:11
  #2643 (permalink)  
 
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The flights up and back are on seperate days so it looks like a way to make some cash on what would otherwise be a positioning flight for a charter ex CNS.
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Old 30th Oct 2023, 23:02
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Originally Posted by Going Nowhere
The flights up and back are on seperate days so it looks like a way to make some cash on what would otherwise be a positioning flight for a charter ex CNS.
It will be interesting to see if any one is going to shell out $149 one way for that mid-week with essentially zero flexibility.
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Old 30th Oct 2023, 23:20
  #2645 (permalink)  
 
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You would be surprised what people will book to save a buck.

Itís a route notorious for exorbitant last minute fares. Having a quick look the other two are 30-40% more expensive for comparable times.
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Old 31st Oct 2023, 10:43
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Originally Posted by PoppaJo
You would be surprised what people will book to save a buck.

It’s a route notorious for exorbitant last minute fares. Having a quick look the other two are 30-40% more expensive for comparable times.
If pax want to save $$ they will be grabbing the 6AM Va option for $119, or driving up/down the M1 to grab a Bonza service, ex OOL it’s $59 for a 10AM flight in December or $89 ex MCY on Launch day for an 8AM dep. For an airline keen to grab FIFO business I find it strange they are dead heading an aircraft on one of the two key days for FIFO turnarounds. FWIW Bonza is $119 for a departure tomorrow ex MCY.
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Old 1st Nov 2023, 08:21
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You've got to hand it to the Rex marketing people - not many would have the chutzpah to brand selling tickets on a once a week repositioning flight as a, "NEW ROUTE".


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Old 1st Nov 2023, 08:44
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Rex's submission, to the recent Senate Committee pantomime, called Qantas "the Lying Kangaroo". There must be a pithy equivalent for Rex.
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Old 1st Nov 2023, 09:02
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The Sanctimonious Singaporean, perhaps, however that fails to recognise the contribution of the Bloviating Beetroot.
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Old 1st Nov 2023, 09:25
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Reckon that REX is just testing the waters here, either one of two things will follow
1) More NJE Dashys coming and the NJE brand will grow in Qld in the RPT sector
2) Precursor to next new 737 route when jet number 10 arrives

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Old 1st Nov 2023, 09:28
  #2651 (permalink)  
 
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Originally Posted by Deano969
Reckon that REX is just testing the waters here, either one of two things will follow
1) More NJE Dashys coming and the NJE brand will grow in Qld in the RPT sector
2) Precursor to next new 737 route when jet number 10 arrives
where's the money coming from?
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Old 1st Nov 2023, 11:30
  #2652 (permalink)  
 
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I suspect that this BNE - CNS thing is more focussed on trying to generate revenue than anything else. Rex domestic closed October out having carried something in the vicinity of 156,400 pax on some 1,240 flights. I very strongly suspect that they did that at a loss. That suspicion is based on the fact that they had a somewhat better September (152,450 pax on some 1,194 flights) and didn't make money on those numbers (and here, I fully acknowledge the danger in using the absence of evidence (no "we're in the money" unaudited results announcement) as a surrogate for evidence of absence).
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Old 1st Nov 2023, 15:29
  #2653 (permalink)  
 
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Is it possible their existence is threatened?
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Old 1st Nov 2023, 20:21
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Originally Posted by Icarus2001
Is it possible their existence is threatened?
PAG will shortly have a 48% stake and two board seats. I would assume that stake will increase as they will need more cash from around 2025 onwards.

The question is what do they want to to do with the Saab operation. Throw cash at it or reduce it significantly. I donít think they planned on this Saab distraction when they signed the deal, it was all about 737s, and ridiculous financial projections from the operator.
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Old 1st Nov 2023, 21:38
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Originally Posted by PoppaJo
PAG will shortly have a 48% stake and two board seats. I would assume that stake will increase as they will need more cash from around 2025 onwards.

The question is what do they want to to do with the Saab operation. Throw cash at it or reduce it significantly. I donít think they planned on this Saab distraction when they signed the deal, it was all about 737s, and ridiculous financial projections from the operator.
The language used during some of their announcements is exactly that. They expected the Saab operation to continue to spin a profit even when they took their eye off it. The reality is they have spent the last decade spending tomorrow's capex and now they say its a drag on their financials.

10 years ago, Saab came to Rex and said they had the idea for an updated 340. Better engines, avionics and an APU. LKH essentially laughed in their faces. Now who's laughing? No support from GE, minimal support from Saab, federal government money all dried up. No pilots, no engines. But hey, it's Qantas' fault!
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Old 2nd Nov 2023, 01:42
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Originally Posted by Icarus2001
Is it possible their existence is threatened?
Generally, you can only run at a loss for so long. That said, Virgin illustrated that that "lingering death" state can persist for quite a few years if you've got largely clueless investors happy to shovel cash into the furnace.

In Rex's case though, PAG are unlikely to be anywhere nearly as clueless as VA's investors.

Originally Posted by PoppaJo
PAG will shortly have a 48% stake and two board seats. I would assume that stake will increase as they will need more cash from around 2025 onwards.
​​​​​​...
PAG have already got their two seats; Pan and Khotkar. And I can't imagine that they are happy little Vegemites at this time. Rex have drawn down nearly two thirds of the $150 million funding (and are probably now getting ready to make another withdrawal from the PAGgy Bank).

And PAG will only have that 48 percent stake if they elect to convert the notes that they are holding. Given that the notes have a Face Value of $1 and a Conversion Price of $1.50, I cannot see why PAG would elect to convert their notes unless the share price was, at the very least, close to $1.50. PAG retain the option of simply redeeming the notes at their face value (ie getting their investment back).

This is why share price is absolutely critical to Rex. If PAG elect to redeem their investment it would probably tank Rex; apart from the money side of the equation, it would say to the market that, having seen the business from the inside for a few years, they have no confidence in the operation.


Originally Posted by PoppaJo
...
I donít think they planned on this Saab distraction when they signed the deal, it was all about 737s, and ridiculous financial projections from the operator.
​​​​​​​This whole domestic thing was sold to PAG as the very rich icing on an ordinary but otherwise palatable cake, that being the Saab regional operations. We've all read the Project Mother hoop-la where Rex were just going to scoop up "distressed" assets and crews on the cheap and ride off into the sunset with the 30 percent of the domestic market they'd snatched from VA's cold dead hand.

It is pretty clear from the structure of the PAG deal ($1.50 conversion price) and the Management Incentive Scheme (executive bonuses) that was created at the same time, that Rex saw/sold their foray into domestic as Rivers of Gold. The MIS has a floor financial KPI of $50 million Statutory Profit Before Tax, escalating in $50 million tranches to $200 million. That's pretty clearly what Rex were expecting when they went into this three years ago.
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Old 2nd Nov 2023, 01:47
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Project Mother.

Yes who can forget. Now what bout the $1-1.6B valuation they had on a new upcoming frequent flyer program.

Yes, Billion.
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Old 2nd Nov 2023, 04:55
  #2658 (permalink)  
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Originally Posted by PoppaJo
Project Mother.

Yes who can forget. Now what bout the $1-1.6B valuation they had on a new upcoming frequent flyer program.

Yes, Billion.
More like Project MotherF***er, am I right?
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Old 2nd Nov 2023, 11:05
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Originally Posted by PoppaJo
Project Mother.

Yes who can forget. Now what bout the $1-1.6B valuation they had on a new upcoming frequent flyer program.

Yes, Billion.
That's right, I had forgotten about that little gem - an eventual value of between $1 billion and $1.6 billion 3-4 years after capital city flights commenced.

Does Rex even have someone running Loyalty these days? (Loyalty as in frequent flyer, rather than the usually required fealty to LKH).

Last edited by MickG0105; 2nd Nov 2023 at 11:08. Reason: Clarification re "loyalty"
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Old 2nd Nov 2023, 12:27
  #2660 (permalink)  
 
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Loyalty is the poor cadets weeding the pool area at AAPA on a summer stinker.
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