REX to transition to ATRs, start domestic jet ops
I assume a further cash injection will be landing shortly if they intend to grow the loss making business?
They don’t appear to have enough cash to get out of 2025. Another $100m should tidy them over until 2027/8
They don’t appear to have enough cash to get out of 2025. Another $100m should tidy them over until 2027/8
It's an interesting scenario because LKH and Singaporean friends will lose their stronghold. It could be the case that he is shown the door from the board
I think that LKH packed his parachute when he set up a separate JV for the NJE acquisition; it gives him an 'exit, stage left' option.
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The next batch of Singapore NGs won’t be available until this December and into the next December. All depends on engineering however on exit.
I note the first few coming off lease are tied to Pembroke who are already tied to Virgin with the old Tiger Singapore A320 leases.
Would be wise for Virgin to pickup all these leases, that should alleviate some fleet pain in the coming years.
I don’t think Rex is in the position to bargain top dollar. Everyone else can, they are really only in the position to negotiate bottom dollar, that ship has now sailed.
I note the first few coming off lease are tied to Pembroke who are already tied to Virgin with the old Tiger Singapore A320 leases.
Would be wise for Virgin to pickup all these leases, that should alleviate some fleet pain in the coming years.
I don’t think Rex is in the position to bargain top dollar. Everyone else can, they are really only in the position to negotiate bottom dollar, that ship has now sailed.
I am still baffled by the release of RQG by Rex and its subsequent parting out in ASP, market cannot be that tight or it had a serious issue, apart from Rex not willing to pay the market rates in todays market!
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With RQG it seems like the leasor was just determined to convert the aircraft to freight. But I'm sure the rest is probably true- that being said, how much is too much?
It may be possible the outgoing SQ/MI 738s coming off lease over there are coming to REX to replace another 1 (or 2) ex-VA older 738s (which I'm assuming are probably coming off lease on Covid terms). So little (if not no) net gain for Rex.
Can't see ZL renegotiating lease terms on the remaining old ex-VA 738s.
Can't see ZL renegotiating lease terms on the remaining old ex-VA 738s.
I'm struggling to see how they will raise any further capital without first taking the wire brush to the current set-up. Domestic jet is performing terribly; as bad as April was (it was their worst month this FY), the first week of May was worse (around 29,800 pax over 306 flights). Any lenders looking at the Australian aviation market at the moment will be as nervous as long-tail cats in a room full of rocking chairs.
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I'm struggling to see how they will raise any further capital without first taking the wire brush to the current set-up. Domestic jet is performing terribly; as bad as April was (it was their worst month this FY), the first week of May was worse (around 29,800 pax over 306 flights). Any lenders looking at the Australian aviation market at the moment will be as nervous as long-tail cats in a room full of rocking chairs.
While I don’t doubt your numbers, having a brief look, currently 8 aircraft in the air, loads vary but averaged out at 43%.
I don’t know what is next for this business. The obvious concern is costs are increasing but loads are trending backwards. That’s generally the moment in time when people start getting sacked and new minds come in. The really strange thing with this operator, is they just appear to be sitting back and doing not much at all. They must have a money tree or something growing out the back.
I think it's a slow time of year and the great Covid exhale is over, with now many overextended and unable to afford those 'cheap holidays'. I think all airlines will be losing custom over the next few months if not for a few years to come.
Virgin boss did allude at the a challenging half ahead not that long ago, I think I would reword that and say ‘a few’ half’s ahead. Some commentary from Qantas last week also hinting at some pullback in Jetstar. Certainly a shift in tone.
US carriers under the big 3 are in some pain currently.
This is the time you want those corporate contracts, revenue which will keep you afloat. Rex, Bonza etc, are in a bad spot should the economy start tanking. Wouldn’t expect any significant market shift until FY26.
US carriers under the big 3 are in some pain currently.
This is the time you want those corporate contracts, revenue which will keep you afloat. Rex, Bonza etc, are in a bad spot should the economy start tanking. Wouldn’t expect any significant market shift until FY26.
The more I read the worse it looks. Difficult to see REX existing in its present form by the end of the year without a massive cash injection.
So how does that sit as a publicly listed company?
So how does that sit as a publicly listed company?
I'm struggling to see how they will raise any further capital without first taking the wire brush to the current set-up. Domestic jet is performing terribly; as bad as April was (it was their worst month this FY), the first week of May was worse (around 29,800 pax over 306 flights). Any lenders looking at the Australian aviation market at the moment will be as nervous as long-tail cats in a room full of rocking chairs.
I constantly entertain the notion that I may be mistaken so I'd invite others to do the same.
...
The obvious concern is costs are increasing but loads are trending backwards. That’s generally the moment in time when people start getting sacked and new minds come in. The really strange thing with this operator, is they just appear to be sitting back and doing not much at all. ...
The obvious concern is costs are increasing but loads are trending backwards. That’s generally the moment in time when people start getting sacked and new minds come in. The really strange thing with this operator, is they just appear to be sitting back and doing not much at all. ...
While another $100m will be needed, it’s hard to see how one could fund this any further.
The pressure will on very soon to make this Jet operation somewhat profitable and sustainable. Time is running out.
Last edited by nomess; 11th May 2024 at 02:24.