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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 26th Mar 2021, 09:22
  #881 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 343
Originally Posted by transition_alt View Post
Whilst I agree that Rex's load factors are low, it needs to be mentioned that the promo fares require passengers to pay $6 for seat selection. For some, this is a cost they don't want to pay.

Rex's booking system does not assign a seat to those who don't pay until check-in. All seats are available for passengers who pay for a more flexible fare, legroom seats or $6. Therefore, snooping at seat maps isn't portraying a completely accurate economy figure.
Agreed, we're not talking completely accurate here but the degree of accuracy shouldn't be difficult to estimate. How many of the $79 promotional seats do you reckon are offered on each flight? 10? 15?
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Old 26th Mar 2021, 10:15
  #882 (permalink)  
 
Join Date: Mar 2014
Location: Brisbane
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Originally Posted by MickG0105 View Post
Agreed, we're not talking completely accurate here but the degree of accuracy shouldn't be difficult to estimate. How many of the $79 promotional seats do you reckon are offered on each flight? 10? 15?
I will put bets on 30-40% of seats being sold as promo during their introductory period. This would also concur with some pax loads whilst economy fares are still $79.

There have been flights with 60 odd pax while tickets are still being sold at the promo price
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Old 26th Mar 2021, 10:52
  #883 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
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Originally Posted by transition_alt View Post
I will put bets on 30-40% of seats being sold as promo during their introductory period.
That would equate to 60-odd $79 seats a flight - your break even point would be 90+ percent.

Originally Posted by transition_alt View Post
This would also concur with some pax loads whilst economy fares are still $79. There have been flights with 60 odd pax while tickets are still being sold at the promo price
I've not seen any evidence of flights with 60 odd pax with the $79 promo fares still being offered. From what I've seen 15 or so bookings sees off the $79 fares and the $99 fares disappear at around 50.

Time will tell. We'll see what comes first - Rex making it to the end of the current financial year or an ASX announcement of an extraordinary nature.
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Old 27th Mar 2021, 03:22
  #884 (permalink)  
 
Join Date: Feb 2001
Location: Australia
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Anyone got some hard cash that needs a clean???

SN
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Old 27th Mar 2021, 09:28
  #885 (permalink)  
 
Join Date: Jun 2003
Location: MEL
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Just off ZL145, the 1730 SYD-MEL, had 28 pax on the flight, booked a $79 fare on Thursday, when the cart came along I ordered a beer ($7) and gave the FA a 10, said she would be back with the change, interestingly REX only accept cash onboard, no plastic. The FA came back 10 mins later said they didn't have any change as I was the only person to have bought something and gave me my $10 back, so that's another $7 the flight lost, but I got a cheap ticket and a free beer.
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Old 27th Mar 2021, 10:02
  #886 (permalink)  
 
Join Date: Apr 2010
Location: Asia
Posts: 1,170
Some single digits numbers also across this past week. However was a few 80/90s.

Surely would be at least negative $1m a week going off some rough numbers.
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Old 27th Mar 2021, 10:31
  #887 (permalink)  
 
Join Date: Mar 2014
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Rex have acknowledged there will be losses initially. Such is life for ANY new business. No one can expect 100% load factors in their first weeks of operation.

Looking at the bigger picture, early signs are positive for an overall success of the operation.

The $150 million investment is intended to absorb these losses. Anyone who thinks that is where PAG will end their relationship with Rex is kidding themselves.

There are lots of naysayers on here which is quite sad given a lot of people at Rex are likely your ex-colleagues or someone you know. Regardless of Rexís domestic success, they wonít be taking your job away. At the end of the day, this is a rumour network and pilots think they are experts at running businesses
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Old 27th Mar 2021, 10:47
  #888 (permalink)  
 
Join Date: Jun 2011
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Originally Posted by transition_alt View Post
Looking at the bigger picture, early signs are positive for an overall success of the operation.

The $150 million investment is intended to absorb these losses. Anyone who thinks that is where PAG will end their relationship with Rex is kidding themselves.
Wasn't the pitch to investors based on Virgin ceasing operations?
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Old 27th Mar 2021, 10:58
  #889 (permalink)  
 
Join Date: Mar 2014
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Originally Posted by dr dre View Post
Wasn't the pitch to investors based on Virgin ceasing operations?
Of course it was. However, the investment wasnít signed on the dotted line until late last year and not even funded until earlier this month.

Plans change and PAG would know very well Virgin are here to stay. Yet the investment continued.
They own more than $40 billion in assets, a company like that (Bain as well) doesnít just throw away money for the sake of it. They can see opportunities and there are in fact opportunities. Itís just a matter of the painfully slow process to find what works and what doesnít.

A perfect example is the Gold Coast. Business travel not recovering? Okay, whatís making money currently? Tourism is starting to increase again so letís look at leisure destinations. As the frequent flyer program isnít set up as yet it may be a better idea as leisure travel has less of a need for these benefits.

Qantas fly leisure routes too. It doesnít change their identity though
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Old 27th Mar 2021, 11:08
  #890 (permalink)  
 
Join Date: Feb 2011
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Originally Posted by Soup Nazi View Post
Anyone got some hard cash that needs a clean???

SN
and that sums up Rex's Singaporean owner completely
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Old 28th Mar 2021, 00:42
  #891 (permalink)  
 
Join Date: May 2016
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It would probably be handy to get a few things straight here. Rex is not Compass. Rex's foray into jet operations is not a new business/start-up, it's an expansion. As such the financials are a little bit different. The expansion will have some fixed costs associated with it that do not generate revenue (AOC set up, route set-up, flight/cabin crew training, etc) - that's what a chunk of the PAG seed money is there for.

And note, the $150 million is structured in three $50 million tranches. PAG are not mugs, there will be internal hurdles and triggers associated with the draw downs. Moreover, the whole PAG deal is completely underwritten by an equity stake in the business - if the expansion goes pear-shaped, PAG will end up owning half of Rex (which would return to its mildly profitable regional roots). At this point Rex have drawn down their first $50 million tranche and would almost certainly be getting ready to dip into the second.

Any old how, because you've got that big chunk of set-up costs that need to be paid back you don't want to be adding to those costs, so once you pull the trigger your initial operations should at the very least be coming close to breaking even. That's likely not the case at the moment. No one would have planned for 80 percent load factors right out of the gate but you can bet your bottom dollar that the business plan would have had something like 50 percent load factors for month one. And that was likely on a nine return flights a day basis. They almost certainly have not hit that target. And April's planning target will be a notch up again on March.

More broadly, if you look at a basic measure like asset utilisation, that's not flash. First flight is at 0700, last lands at 2130, six flights in each direction on a super simple point - point shuttle. Compared to the majors, they are undercooking utilisation by at least 15 percent and that's leaving aside the fact that one of their then four jets was sitting at Wagga for most of the first month.

Their original business plan was for nine return flights a day, Sydney - Melbourne. Despite all of Sharpie's carry on they most assuredly had sufficient aircraft to manage that but they didn't - one factor would have driven that change of schedule. They've then been a bit over the shop with where to next - Brisbane, Adelaide, Gold Coast, etc Now, no plan survives contact with the enemy but you generally like something that has had a few months work put into it to hold together longer than a few weeks.

And they had a rejected take-off out of Sydney in week 1 and some sort of tech issue with RQC which very luckily for Rex didn't get picked up by the media. So, all in all, a less than stellar start.

Next month, things don't get easier for Rex, ostensibly they get harder, and harder by at least an order of magnitude. OOL and ADL come on line which means that (a) they won't have the luxury of two spare jets to cover for RQC's next tantrum and (b) they'll have to manage a more tightly integrated schedule.

As to naysaying, calling stuff as it is is not naysaying. To be successful, Rex's expansion needed a lot of intermeshing moving parts to come together pretty much perfectly - thus far, I don't think that we are seeing that.

In the long run, as the Zen Master said, "We'll see."
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Old 28th Mar 2021, 01:01
  #892 (permalink)  
 
Join Date: Apr 2010
Location: Asia
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I got nervous when basics like (a) change your booking online, has been out of service since mid December (Itís nearly April for Christ sake), and (b) online check-in, did not work from the get go so they sidelined that for the moment. These are just everyday basics that no airline should go without for days left alone nearly 4 months.

I still think they would be better going after the Tiger share and bringing in things like carry on only (cheaper fares), and Ďbig seat up frontí sort of product like Sprit in the states.

Jetstar (now Virgin) are now sending in more machines from Japan and Singapore, also which further dilutes whatever revenue Rex wanted.

I still donít know what share of the revenue market they are actually taking. Jetstar are pretty clear they want that Tiger share, and are sending in the equipment to cover that. Virgin looking at a lite model fare bucket like Delta, in both cabins, to again, take that revenue, which further squeezes Rex.

They also had 6 months to setup some form of basic FF program, now faced with these double credit promos from the other two and points being thrown around everywhere.

To get any form of scale and return on such big investment they need 20-30 aircraft. They acknowledge that having said it many times, but thatís billions of expected revenue with no clear pathway to it.
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Old 28th Mar 2021, 05:22
  #893 (permalink)  
 
Join Date: Jul 2018
Location: Sydney
Posts: 170
Saab schedule is ramping up as of this week due to jobkeeper ending. It could help with 737 loads with connecting pax..
​​​
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Old 31st Mar 2021, 05:22
  #894 (permalink)  
 
Join Date: Sep 2019
Location: Qld
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Originally Posted by Turnleft080 View Post
Struth, a common sense approach. Looking into the crystal ball Singapore would be first mob on the list that would hold interest in merging Rex/virgin. They would buy and pay out Bain and PAG.
The LH aircraft won't be 330s/777 it would be a one fits all i.e. A350,B787-9, or last pick 777 with folding wings and I hope all the redundant pilots get first pick.
That's assuming covid is over and Singapore are all cashed up again.
If Rex are employing the Tiger pilots then they may go full circle and be flying back with Virgin's active Tiger AOC come 2 or 3 years.
Originally Posted by Lookleft View Post
When will people understand that SIA is very good at what it does within the Republic of Singapore but outside of its borders it has a large number of failed airline investments. Why would SIA or rather Temasek consider putting any more money into an Australian airline given the failure of Ansett, Tiger and Virgin? I can't see any state owned carrier investing until their own balance sheet has recovered from the ravages of COVID. As for Qantas going the way of Ansett because of fleet types, its not going to happen. Mainline only has one narrow body type and one wide body type on its domestic network. The other aircraft are flown by contractors. As for LH it is only the 787 and A330 that it is currently operating. Types grounded or not yet purchased can't be included in the "too many types" box. Qantas is run by people who at least understand the industry. Ansett was run by a newspaper owner and a road transport owner who had very little knowledge or interest in the airline industry.
Agreed. Qantas has already seen the back of Singapore Airlines from the Australian domestic market three times already. To think QF would be scared of SQ would be laughable at best.

Dixon oversaw the first demise (NZ and AN) and Joyce got to see 'SQ' run off from the Australian domestic scene with their tail inbetween their legs TWICE after the Tiger Airways and Virgin financial failures. The combined Virgin failure/Covid effects meant SQ also had to be bailed out by their government parent (Temasek) as well.

A lot of speculation in regards to SQ and/or Temasek regarding any interest in the Australian domestic market (apart from SQ's ill-fated Virgin 20% stake) in the past few years prior to COVID had always ended up as fake news.

I don't any airline (state owned or not) will be investing any further in other airlines apart from the existing ones they may keep until their financial balances recover to a point where some aren't as reliant on government handouts/bailouts.
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Old 3rd Apr 2021, 12:39
  #895 (permalink)  
 
Join Date: Nov 2003
Location: Australia
Posts: 397
So how’s Rexjet going in the new month and the busy Easter time - should be making a motza 😳
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Old 7th Apr 2021, 03:22
  #896 (permalink)  
 
Join Date: Nov 2003
Location: Australia
Posts: 397
They must be doing exceptionally well or exceptionally poorly or is it the mouthpiece JS is on leave.
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Old 7th Apr 2021, 03:58
  #897 (permalink)  
 
Join Date: Apr 2010
Location: Asia
Posts: 1,170
Virgin appears to be playing the game of matching every Rex fare price regardless if the flight is this afternoon or next month.
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Old 7th Apr 2021, 12:35
  #898 (permalink)  
 
Join Date: Oct 2013
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Originally Posted by wheels_down View Post
Virgin appears to be playing the game of matching every Rex fare price regardless if the flight is this afternoon or next month.
Oh dear, you know what that means, Not-so-Sharp will be running to the ACCC crying his eyes out and sooking about so-called unfair predatory actions that are not in the best interests of the fare paying public..... etc etc tug tug tug.
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Old 10th Apr 2021, 03:22
  #899 (permalink)  
 
Join Date: Jan 2017
Location: AUS
Posts: 67
Just watched the pax jump off an ADL MEL flight. Can't have been more than 40 onboard. Would be very interested to know how the first fortnight has been for them.
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Old 10th Apr 2021, 05:11
  #900 (permalink)  
 
Join Date: Apr 2021
Location: Perth
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Originally Posted by wheels_down View Post
Virgin appears to be playing the game of matching every Rex fare price regardless if the flight is this afternoon or next month.
And with the addition of 5 737's to VA Mainline over the next 3 months, they will continue to do so. One would have to think Bain has deeper pockets than Sharp & Co. do?
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