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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 10th May 2021, 22:25
  #1081 (permalink)  
 
Join Date: Dec 2007
Location: Asia Pacific
Age: 50
Posts: 1,951
I hope REX survive for the foreseeable future as I have friends that got gigs with them that otherwise would have gone to the wall! Watching their share price trend downward is concerning -(
its an ugly industry these days full of uncertainty, I wish all employees luck-)
Agreed, but I think they would be ok if Rex went bang. Most of the routes are subsidised regional routes and someone will end up flying them. Personally I'd like to see more smaller players on those routes, especially if they are local, rather than one operator sucking money out of the Feds and employing failed pollies.
minigundiplomat is offline  
Old 11th May 2021, 00:38
  #1082 (permalink)  
 
Join Date: Nov 2006
Location: Auckland, New Zealand
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https://australianaviation.com.au/20...ore-routes/Rex has promised it will launch more services on Qantas exclusive routes as the bitter row between the airlines over network expansion continues.

The regional carrier made the announcement alongside revealing its demand is back to 60 per cent of pre-COVID levels and suggesting the business expects to break even during FY2021.

Rex’s promise to take on Qantas marks another escalation in the war of words between the two airlines, which have for months been launching services to destinations previously exclusive to each other.

In the last few weeks alone, Qantas’ chief executive Alan Joyce has mocked Rex’s “empty aircraft” while Rex deputy chairman John Sharp has said his rival is “technically insolvent”.

more
Chris2303 is offline  
Old 11th May 2021, 04:46
  #1083 (permalink)  
 
Join Date: Jan 2006
Location: Australia
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Rex the street fighter has entered the boxing ring and come up against seasoned professionals. They are punching as hard as they can but a resurgent Virgin has everyone’s attention. Rex will need recapitalising to continue their battle and so their position will depend on the willingness of their Singaporean masters. Virgin is the real story to come (best LF last few months) no matter how often JS wants to pretend he’s significant or relevant.
crosscutter is offline  
Old 11th May 2021, 04:56
  #1084 (permalink)  
 
Join Date: Dec 2001
Location: Melbourne
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Originally Posted by crosscutter View Post
Rex the street fighter has entered the boxing ring and come up against seasoned professionals. They are punching as hard as they can but a resurgent Virgin has everyone’s attention. Rex will need recapitalising to continue their battle and so their position will depend on the willingness of their Singaporean masters. Virgin is the real story to come (best LF last few months) no matter how often JS wants to pretend he’s significant or relevant.
You're right. VA appears to e doing very well at the moment. JH has forced a discipline on the business that it lacked over the past decade. She has not engaged in the stupid word games with Sharp leaving that the AJ but instead is responding as necessary taking advantage of the existing VA and Velocity customer bases.

It looks increasingly like Bain is going to make millions from its VA investment. I doubt Bain is interested in saving REX from its folly even though I think that was Sharp's fallback plan.
1A_Please is offline  
Old 11th May 2021, 05:55
  #1085 (permalink)  
 
Join Date: Feb 2011
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Originally Posted by 1A_Please View Post
JH has forced a discipline on the business that it lacked over the past decade.
Debatable. Possibly an optical illusion from what I’ve been told. Some old habits have apparently started to re surface again.
PoppaJo is offline  
Old 11th May 2021, 06:03
  #1086 (permalink)  
 
Join Date: Sep 2019
Location: Qld
Posts: 114
Jayne did mention about carrying the pain of paying the costs of the $39 fares herself (against REX) for a bit.

https://www.afr.com/companies/transp...0210505-p57p7x
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Old 12th May 2021, 02:48
  #1087 (permalink)  
 
Join Date: Sep 2006
Location: Inside the Industry
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You're right. VA appears to be doing very well at the moment.
Deservedly. I have been using VA often over the last 3 months for inter and intra state business travel. The service has been top notch.
industry insider is offline  
Old 12th May 2021, 08:26
  #1088 (permalink)  
 
Join Date: Jan 2017
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https://simpleflying.com/rex-orders-...box=1620797820

Looks like they're so happy with the services that another 4 737s are on the way with JS claiming things are going better than planned! 🤔
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Old 12th May 2021, 09:19
  #1089 (permalink)  
 
Join Date: Jan 2019
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Originally Posted by pinkpanther1 View Post
https://simpleflying.com/rex-orders-...box=1620797820

Looks like they're so happy with the services that another 4 737s are on the way with JS claiming things are going better than planned! 🤔
Things are going that well.....or this was always the plan and they had no way of getting out of the additional 4 aircraft?

Having said that - they do need some sort of economies of scale to make this whole thing work....
Colonel_Klink is offline  
Old 12th May 2021, 09:21
  #1090 (permalink)  
 
Join Date: Jan 2021
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So going back to the initial Rex strategy this is what they had to say about operating statistics and projections;

The best way to have a good handle on the revenue projections is to consider the following (using the Syd-Mel route as a guide) ▪ One aircraft carries about 300,000 pax a year at 80% load factor
▪ Average ticket price is $200 (pre-Covid)
▪ If Rex’s cost advantage is 30% then that means $60 per ticket
▪ Giving up $20 as fare discount and assuming the $40 as profits would translate to $12M profits per aircraft
▪ 10 aircraft would translate to $120M profits
▪ In reality, the average cost per passenger (crew, fuel, engineering, lease etc) for typical carrier would be about $50 ▪ Depending on where the average ticket price will land, the profits per aircraft could be very significant
Are Rex getting an 80% load factor?
Is the average ticket price $200?
Do they still think that 10 aircraft are going to “translate to $120M profits”?
Bull_Shark is offline  
Old 12th May 2021, 22:34
  #1091 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
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Originally Posted by pinkpanther1 View Post
https://simpleflying.com/rex-orders-...box=1620797820

Looks like they're so happy with the services that another 4 737s are on the way with JS claiming things are going better than planned! 🤔
You cannot reasonably trust anything that bloke says. The other 4 737s are on the way likely for one reason - that's how Rex structured the leasing deal back late last year. The leasing would have been arranged as a package - there would have been some float in the delivery/acceptance schedule and Rex will have pushed that as far back as they can within the bounds of the deal. And given Rex's management and all the hoopla, another factor that is likely playing out is saving face.

Sharp also said
“I was talking to one of our pilots this morning. He says he’s never done a flight between Melbourne and Adelaide, or back the other way without 160 passengers onboard the aircraft that takes 165 passengers. So it gives you an idea of the load factors that we’re getting.
Does anyone believe any of that? ZL437 from Melbourne to Adelaide this morning will be flat out cracking 100 pax and ZL444 from Adelaide to Melbourne this afternoon will almost certainly have no better than a 50-60% load. And, of course, the Deputy Chairman seems unaware that 'the aircraft' actually takes 176 pax - 8 J, and 168 punters.
MickG0105 is offline  
Old 12th May 2021, 22:48
  #1092 (permalink)  
 
Join Date: Dec 2001
Location: Melbourne
Posts: 348
Quote:
The best way to have a good handle on the revenue projections is to consider the following (using the Syd-Mel route as a guide) ▪ One aircraft carries about 300,000 pax a year at 80% load factor
▪ Average ticket price is $200 (pre-Covid)
▪ If Rex’s cost advantage is 30% then that means $60 per ticket
▪ Giving up $20 as fare discount and assuming the $40 as profits would translate to $12M profits per aircraft
▪ 10 aircraft would translate to $120M profits
▪ In reality, the average cost per passenger (crew, fuel, engineering, lease etc) for typical carrier would be about $50 ▪ Depending on where the average ticket price will land, the profits per aircraft could be very significant
Are Rex getting an 80% load factor?
Is the average ticket price $200?
Do they still think that 10 aircraft are going to “translate to $120M profits”?
That is pretty damning. Cost per pax was estimated at $50 with a load factor of 80%. Currently it seems REX is getting a LF of around 40% at best meaning cost per pax is $100. At the same time they are flogging tickets for $39 so they are nowhere near their planned $200. $120M could still be the right figure just with a negative sign in front.
1A_Please is offline  
Old 16th May 2021, 01:48
  #1093 (permalink)  
 
Join Date: Aug 2019
Location: Melbourne
Posts: 7
Just waiting for the entire operation to fizz out whilst munching on popcorn.

Sure, mid year school holidays might add some punters to backfill what would’ve been Tiger’s operation but other than that it’s bleeding.

Mates (who used to work at Rex) have issues with their terrible middle management and staff morale is at a terrifying low.

Qantas and Jetstar will live another day.
So too, will Virgin. I heard at the terminal the other day: “Rex who?”
Virgin still has name recognition and a loyalty scheme. What’s Rex going to offer? DingoDollars? RexDollars?

Everyone in Australia was already sold on the idea that if you ain’t going Qantas, then you going Virgin. JH seems to be doing a better job at V then at the star, as long as their old ways don’t creep back in, Rex will be gone in under 18 months.
flyhigherflybetter is offline  
Old 16th May 2021, 02:02
  #1094 (permalink)  
 
Join Date: Aug 2002
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The question is, will the financial problems of the 737 operation bring the whole company to a halt ? Or have they managed to financially quarantine the profitable turboprop operations from the 737 ops ?
slice is offline  
Old 16th May 2021, 07:19
  #1095 (permalink)  
 
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Originally Posted by slice View Post
The question is, will the financial problems of the 737 operation bring the whole company to a halt ? Or have they managed to financially quarantine the profitable turboprop operations from the 737 ops ?
Not sure of any “financial quarantine”, but it’s my understanding that both operate under the one AOC?
KRUSTY 34 is offline  
Old 16th May 2021, 08:37
  #1096 (permalink)  
 
Join Date: May 2016
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Originally Posted by slice View Post
The question is, will the financial problems of the 737 operation bring the whole company to a halt ? Or have they managed to financially quarantine the profitable turboprop operations from the 737 ops ?
From publicly available information there's no financial firewalling between any of Rex's operations. The "parent" Regional Express Holdings has deeds of cross guarantee with all the Rex entities (eg Pel-Air, Rex Freight and Charter, Rex Investment Holdings, the Pilot Academy, etc). The debts of any entity become the debts of the parent and vice versa. Much like Billy Joel sang, "we'd all go down together".
MickG0105 is offline  
Old 16th May 2021, 10:39
  #1097 (permalink)  
 
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What a bunch of morbid bastards you are, particularly the knob with the popcorn
Trevor the lover is offline  
Old 16th May 2021, 12:32
  #1098 (permalink)  
 
Join Date: Feb 2018
Location: Brisbane
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Probably no more morbid than the published REX playsheet which openly planned to capitalize on Virgin's demise.
I'd say that would have put more than a few affected people offside.
TimmyTee is offline  
Old 16th May 2021, 12:45
  #1099 (permalink)  
 
Join Date: Jul 2008
Location: Australia
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For those who remember Compass Mk I and II it all looks very familiar.
Lookleft is offline  
Old 16th May 2021, 20:49
  #1100 (permalink)  
 
Join Date: Dec 2007
Location: Asia Pacific
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What a bunch of morbid bastards you are, particularly the knob with the popcorn
Got popcorn and beer to watch the John Sharpe sh1tshow end.... hate to think what that makes me.
minigundiplomat is offline  

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