Go Back  PPRuNe Forums > PPRuNe Worldwide > Australia, New Zealand & the Pacific
Reload this Page >

REX to transition to ATRs, start domestic jet ops

Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

REX to transition to ATRs, start domestic jet ops

Old 2nd May 2021, 23:40
  #1001 (permalink)  
 
Join Date: Feb 2012
Location: BBN
Posts: 971
Received 88 Likes on 40 Posts
How far does $150m take 6 jets? Surely longer than 6 months?
SHVC is offline  
Old 2nd May 2021, 23:55
  #1002 (permalink)  
 
Join Date: Dec 2006
Location: australia
Posts: 915
Likes: 0
Received 0 Likes on 0 Posts
During the interview for a position mention was made that they (being the beancounters/upper management I assume) had done their homework and expected substantial oncarriage from their regional routes, sounded a bit iffy at the time purely based on volume of travellers.

Clearly the incumbents offer enough so that REX have not established a presence ML-SY-ML and probably won't....for now.

Only hope would appear to swing into the Tiger leisure market, maybe try and develop new/under served routes and then maybe....maybe have another go at the golden triangle later with better brand recognition.

Unless there's a desire or need to lose XXXX amount of $$ you can't sustain the unsustainable.

galdian is offline  
Old 2nd May 2021, 23:56
  #1003 (permalink)  
 
Join Date: Dec 2001
Location: Melbourne
Posts: 418
Likes: 0
Received 19 Likes on 12 Posts
It will last a while but directors have a responsibility to protect their shareholders' and creditors' money. If directors are found to have acted recklessly, they do make themselves personally liable. If they are hopelessly losing money, they have to take action before the end.

VA directors did the responsible thing last year and called in administrators rather than waiting until receivers were brought in which probably ended up with a much poorer outcome for employees and creditors including Velocity members.
1A_Please is offline  
Old 3rd May 2021, 00:12
  #1004 (permalink)  
 
Join Date: Jan 2017
Location: AUS
Posts: 142
Received 26 Likes on 8 Posts
Interview with John Sharp on the today show this morning. Claiming Qantas has been capacity dumping, says QF flights are up 80% since rex started ML to SYD (somehow doesn't make the link between borders opening and flights increasing). You'll need a 9 account but worth a watch.
https://www.9now.com.au/today/2021/c...0s0ip1n9sb2vnb
pinkpanther1 is offline  
Old 3rd May 2021, 00:18
  #1005 (permalink)  
 
Join Date: Dec 2001
Location: Melbourne
Posts: 418
Likes: 0
Received 19 Likes on 12 Posts
JS just on 3AW and told some classic porkies.
  1. When asked if he was losing money on $39 fares, he said REX has always been profitable since it was founded but didn't answer the question. He did say passenger handling charges by gov't and airports is $30 per passenger. So if he has 40 passengers on a flight (good but unlikely for REX!!!) he has a whole $360 to cover leases, maintenance, fuel and staff.
  2. He also said they are debt-free and owe no-one anything which is a complete mischief when the jet fleet is leased which accounting standards say must be held as liabilities on the balance sheet.
  3. He was asked if he would consider only taking pax who had vaccination passports. Given his current situation, he'd probably gladly take the revenue of a person straight out of ICU with Covid.
1A_Please is offline  
Old 3rd May 2021, 00:45
  #1006 (permalink)  
 
Join Date: Dec 2004
Location: melbourne
Posts: 778
Received 55 Likes on 32 Posts
Originally Posted by 1A_Please
JS just on 3AW and told some classic porkies.
  1. When asked if he was losing money on $39 fares, he said REX has always been profitable since it was founded but didn't answer the question. He did say passenger handling charges by gov't and airports is $30 per passenger. So if he has 40 passengers on a flight (good but unlikely for REX!!!) he has a whole $360 to cover leases, maintenance, fuel and staff.
  2. He also said they are debt-free and owe no-one anything which is a complete mischief when the jet fleet is leased which accounting standards say must be held as liabilities on the balance sheet.
  3. He was asked if he would consider only taking pax who had vaccination passports. Given his current situation, he'd probably gladly take the revenue of a person straight out of ICU with Covid.
Heard some of the same interview,didnt seem worried or concerned but good spin doctors are gifted in that area.
blubak is offline  
Old 3rd May 2021, 01:34
  #1007 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 1,099
Received 130 Likes on 73 Posts
Originally Posted by blubak
Heard some of the same interview,didnt seem worried or concerned but good spin doctors are gifted in that area.
You know the saying, if you can keep your head when all about you are losing theirs ... then there's a very good chance that you have no idea what's going on.
MickG0105 is online now  
Old 3rd May 2021, 02:44
  #1008 (permalink)  
 
Join Date: Jul 2020
Location: New Zealand
Posts: 37
Likes: 0
Received 0 Likes on 0 Posts
Does JS really think about what he says. QF and VA are only putting back capacity that they removed due to Covid-19 and they are still not back where they were pre the pandemic.

They have a responsibility to compete and protect their market share particularly when you have someone like Rex that are using the fact they they received a very big payment from JS's mates in the Coalition that wasn't provided like for like to both VA and QF. This is going to end in tears and is another example why governments should not try and pick winners.

I wonder how JS performs with the other aviation companies he is involved in. They are certainly not parading him around!
430W is offline  
Old 3rd May 2021, 05:41
  #1009 (permalink)  
 
Join Date: Jul 2008
Location: AUS
Posts: 86
Likes: 0
Received 3 Likes on 3 Posts
Jet* and VA have both dropped MEL/SYD fares to $39 after JS baited them...
Agent_86 is offline  
Old 3rd May 2021, 05:53
  #1010 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 1,099
Received 130 Likes on 73 Posts
Originally Posted by Agent_86
Jet* and VA have both dropped MEL/SYD fares to $39 after JS baited them...
Baited?!

As Green.Dot noted at #997 Virgin had released $39 MEL-SYD fares yesterday, well before Sharp's media run this morning.

And spare a thought for the financial mechanics of what's going on here. There is a marked difference financially between an airline with 80-odd percent load factors offering $39 fares and an airline with sub-30 percent load factors offering them.

Last edited by MickG0105; 3rd May 2021 at 05:54. Reason: Tidy up
MickG0105 is online now  
Old 3rd May 2021, 06:51
  #1011 (permalink)  
 
Join Date: Dec 2001
Location: Melbourne
Posts: 418
Likes: 0
Received 19 Likes on 12 Posts
Originally Posted by MickG0105
Baited?!

As Green.Dot noted at #997 Virgin had released $39 MEL-SYD fares yesterday, well before Sharp's media run this morning.

And spare a thought for the financial mechanics of what's going on here. There is a marked difference financially between an airline with 80-odd percent load factors offering $39 fares and an airline with sub-30 percent load factors offering them.
The mechanics are very different as you point out. VA can sell 10 $39 seats that they would have previously sold as Velocity reward seats and actually be better off financially and still have an average seat price across the plane of, say, $175 and have successfully diverted 10 pax away from REX. REX are unable to sell 20 seats on a flight when they are only charging $69. Even if they double their seats sold to 40 @ $39, they are only clearing $9 per pax once airport and gov't charges are included so that is a whole $360 for themselves for the whole flight....hardly a recipe for success.
1A_Please is offline  
Old 3rd May 2021, 07:15
  #1012 (permalink)  
 
Join Date: Jan 2017
Location: AUS
Posts: 142
Received 26 Likes on 8 Posts
At this point it's simply a war of attrition. Surely JS can see that he will be the weakest player here?
pinkpanther1 is offline  
Old 3rd May 2021, 08:20
  #1013 (permalink)  
 
Join Date: Jan 2006
Location: Sydney
Posts: 191
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Agent_86
Jet* and VA have both dropped MEL/SYD fares to $39 after JS baited them...
Jetstar are down to $30. Unlike Rex, both VA and JQ have buy on board that can help boost revenue.
ANstar is offline  
Old 3rd May 2021, 08:33
  #1014 (permalink)  
 
Join Date: Nov 2003
Location: Australia
Posts: 446
Received 16 Likes on 9 Posts
Originally Posted by pinkpanther1
At this point it's simply a war of attrition. Surely JS can see that he will be the weakest player here?
And they worry about people who play the pokies ? I suppose it’s different when you’re using other people’s (shareholders) money 😳
On eyre is offline  
Old 3rd May 2021, 09:39
  #1015 (permalink)  
 
Join Date: Dec 2013
Location: Weltschmerz-By-The-Sea, Queensland, Australia
Posts: 1,355
Received 68 Likes on 31 Posts
Originally Posted by 1A_Please
The mechanics are very different as you point out. VA can sell 10 $39 seats that they would have previously sold as Velocity reward seats and actually be better off financially and still have an average seat price across the plane of, say, $175 and have successfully diverted 10 pax away from REX. REX are unable to sell 20 seats on a flight when they are only charging $69. Even if they double their seats sold to 40 @ $39, they are only clearing $9 per pax once airport and gov't charges are included so that is a whole $360 for themselves for the whole flight....hardly a recipe for success.
They arenít clearing $9/pax because thereís still the other $10,000/hr expenses to cover. So a Mel-Syd has something like a $14,640 loss. So they are probably planning to lose a tonne of money on every flight and make it up with frequency. Oh wait...
Australopithecus is offline  
Old 3rd May 2021, 09:44
  #1016 (permalink)  
 
Join Date: Jan 2017
Location: AUS
Posts: 142
Received 26 Likes on 8 Posts
So at around 5 SYD-MEL daily, 7 days a week that's just over $1mil lost a week on that route alone...
pinkpanther1 is offline  
Old 3rd May 2021, 09:49
  #1017 (permalink)  
 
Join Date: Jul 2018
Location: Sydney
Posts: 630
Received 109 Likes on 40 Posts
Originally Posted by Australopithecus
They arenít clearing $9/pax because thereís still the other $10,000/hr expenses to cover. So a Mel-Syd has something like a $14,640 loss. So they are probably planning to lose a tonne of money on every flight and make it up with frequency. Oh wait...
Their leases are 25k per month for each aircraft. Is that quite cheap? Understandably that is only one cost of many.
Ladloy is offline  
Old 3rd May 2021, 09:56
  #1018 (permalink)  
 
Join Date: Feb 2011
Location: Oz
Age: 68
Posts: 1,913
Received 293 Likes on 123 Posts
The Australian
Regional Express Airlines will pay as little as $60,000 a month per aircraft to lease six former Virgin Australia Boeing 737s, which will be used on the lucrative Melbourne-Sydney route.

Although deputy chairman John Sharp would not discuss the leasing arrangements, it is understood the $60,000 a month cost will rise to $100,000 a month after the first 12 months.
PoppaJo is offline  
Old 3rd May 2021, 10:02
  #1019 (permalink)  
 
Join Date: Feb 2002
Location: NSW
Posts: 4,254
Received 26 Likes on 19 Posts
....plus reserves, plus insurance, plus enroute and landing and terminal fees plus plus plus....
TBM-Legend is offline  
Old 3rd May 2021, 10:47
  #1020 (permalink)  
 
Join Date: Feb 2004
Location: Aus
Age: 42
Posts: 376
Received 1 Like on 1 Post
Judging by lead-in fares for the next couple of days it appears that VA have mostly sold their $39 fares whereas Rexís cheapies are still for sale. Make of that what you will.
turbantime is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.