REX to transition to ATRs, start domestic jet ops

[TBM-Legend]

Originally Posted by MickG0105

It is a bit different when you have companies registered in different jurisdictions such as Qantas (Australia) and Jetconnect (NZ). There is also no deed of cross guarantee between Qantas and Jetconnect. Jetconnect files its own financial reports under New Zealand regulations; they are not rolled into the Qantas Group reporting.

That is a very different structure and arrangement to how Rex's domestic operations are set up.

For Mick the oracle:

Jetconnect as filed in NZ
IDENTIFIER SYSTEM IDENTIFIER CATEGORIES

NZ Business Number 9429036875672 Business
details

Shares issued

SHAREHOLDER NUMBER OF SHARES VOTING PERCENTAGE

Qantas Airways Limited ABN 16 009 661901 (Australia) 100 n/a
details

[MickG0105]

Originally Posted by TBM-Legend

For Mick the oracle:

Jetconnect as filed in NZ
IDENTIFIER SYSTEM IDENTIFIER CATEGORIES

NZ Business Number 9429036875672 Business
details

Shares issued

SHAREHOLDER NUMBER OF SHARES VOTING PERCENTAGE

Qantas Airways Limited ABN 16 009 661901 (Australia) 100 n/a
details

Thanks. I was aware of that, I checked it before I posted just as I checked that Jetconnect filed their own reporting in NZ and aren't covered by a deed of cross guarantee with Qantas.

The relationship between Qantas and Jetconnect is nothing like the Rex set-up.

[Ladloy]

Originally Posted by MickG0105

Can I ask how they accomplished this separation? The jet ops are being flown under the same AOC as the Saab ops, aren't they? That AOC is held by Regional Express Pty Limited (ACN 101 325 642). Regional Express Pty Limited is also the registered operator for both the Boeings and the Saabs.

They may have separate operational staff and cost centres but from both the regulatory and financial perspectives both the jets and the Saabs sit under Regional Express Pty Ltd, the wholly owned subsidiary of Regional Express Holdings Limited (ACN 099 547 270). Regional Express Holdings Limited is the ASX-registered traded entity. Regional Express Pty Limited and Regional Express Pty Limited are bound by both ownership and deeds of cross guarantee.

Where's the separation?

Jet ops are under Rex Airlines Pty limited as a subsidiary while saab operations are part pf Regional express Pty limited.

Not saying it means much, but they're supposed to be separate

[MickG0105]

Originally Posted by Ladloy

Jet ops are under Rex Airlines Pty limited as a subsidiary while saab operations are part pf Regional express Pty limited.

Not saying it means much, but they're supposed to be separate

Rex Airlines Pty Limited is a wholly owned subsidiary of Regional Express Pty Limited - there's no regulatory or financial separation there.

[MickG0105]

Originally Posted by No Idea Either

I personally have no idea about anything corporate, but wouldn’t this ‘cross guarantee’ deed be the vehicle for PAG to take the part ownership of the parent company. But it sounds risky as it appears, how I see it, that’s this deed/vehicle may also leave the entire show open to all the debt...........risky business if that’s correct.

No, deeds of cross guarantee are generally used for related entities, not funding deals. The PAG funding was covered by Rex issuing first ranking senior secured convertible notes to PAG. Convertible notes are basically a debt covenant that says if the debt isn't repaid it will be satisfied by being converted into shares.

[plainmaker]

Originally Posted by MickG0105

Rex Airlines Pty Limited is a wholly owned subsidiary of Regional Express Pty Limited - there's no regulatory or financial separation there.

In fact there is a separation. Different legal entities, different ABN's. There is no obligation of a Principal to guarantee a subsidiary's debt, unless a Deed of Guarantee has been executed by the Principal.
I have not researched the corporate make-up of the organisation........but if the B373's were leased by the parent say and then dry leased to the subsidiary, with operational costs (wages, fuel, airway charges and airport fees borne by the subsidiary in its own name, then that is a very neat way to cocoon the operation from the Principal

[MickG0105]

Originally Posted by plainmaker

In fact there is a separation. Different legal entities, different ABN's. There is no obligation of a Principal to guarantee a subsidiary's debt, unless a Deed of Guarantee has been executed by the Principal.
I have not researched the corporate make-up of the organisation........but if the B373's were leased by the parent say and then dry leased to the subsidiary, with operational costs (wages, fuel, airway charges and airport fees borne by the subsidiary in its own name, then that is a very neat way to cocoon the operation from the Principal

As the Zen Master said, "We'll see." Come end of year reporting the subsidiary will have to submit its own financial report if it's a truly separate entity. Do you think that is likely?

Rex didn't go down the path of separating Pel-Air or the Pilot Academy so it would at least be out of character for them to have gone down that route with the 73 ops.

[zanthrus]

So why did REX pay the $66000 fine if they deny being guilty? Why did they pay if the fine is unenforcable and they face no legal action? It all sounds like bull**** to me and REX is running scared.

[No Idea Either]

Thanks Mick👍

[MickG0105]

Originally Posted by plainmaker

In fact there is a separation. Different legal entities, different ABN's. There is no obligation of a Principal to guarantee a subsidiary's debt, unless a Deed of Guarantee has been executed by the Principal.
I have not researched the corporate make-up of the organisation........

I've now looked at the Forms 389 and CF06 for Rex Airlines Pty Ltd ACN 642 400 048 and, as expected, that business is bound to both its immediate parent, Regional Express Pty Ltd, and the ultimate holding entity, Regional Express Holdings Limited, by deeds of cross guarantee. Thus there's no effective separation between the jet ops and the rest of the business.

[Lookleft]

So the upshot of all this discussion is that if the Rex Jet experiment loses more money than the jet and turboprop operation can cover then the whole Rex operation gets shutdown. So this would be similar to Kendell, Hazelton, Skywest and Flight West being shutdown because Ansett owned them and there was no corporate separation?

[MickG0105]

Originally Posted by Lookleft

So the upshot of all this discussion is that if the Rex Jet experiment loses more money than the jet and turboprop operation can cover then the whole Rex operation gets shutdown.

No, a shut-down (bankruptcy or administration) this year would be unlikely. Short of an astounding turnaround or some fancy accounting they'll likely post a loss this financial year. Wouldn't be the first time an airline’s been run at a loss. That will mean tapping further into that PAG money and/or their own reserves.

The bottom-line result for this FY will drive what happens next, we won't find out what that is till late August/early September.

[aviation_enthus]

Originally Posted by Lookleft

So the upshot of all this discussion is that if the Rex Jet experiment loses more money than the jet and turboprop operation can cover then the whole Rex operation gets shutdown. So this would be similar to Kendell, Hazelton, Skywest and Flight West being shutdown because Ansett owned them and there was no corporate separation?

Upshot??

Not sure having a previously successful regional carrier closedown would be considered much of an “upshot” for all the regional communities they serve. Or perhaps the 1000+ staff that work there...

But hey, dancing gleefully on someone’s grave makes it all worth it huh?

[SHVC]

Well, it’s been done before. Remember Ansett and a certain carrier and staff jumping for glee!

[cloudsurfng]

Originally Posted by aviation_enthus

Upshot??

Not sure having a previously successful regional carrier closedown would be considered much of an “upshot” for all the regional communities they serve. Or perhaps the 1000+ staff that work there...

But hey, dancing gleefully on someone’s grave makes it all worth it huh?

despite the hypocrisy in REX’s whinging, I don’t think there is anyone who would want to see REX fail, simply because of the catastrophic effect it would have on so many people.

However, you’d probably have to join a long que in order to have a shuffle on JS’s career grave.

[Lookleft]

I'm not dancing on anyone's grave but was trying to get clarity around the discussion on ownership and the consequence of the jet operation failing. You might want to read the post and reign in the moral indignation.

Well, it’s been done before. Remember Ansett and a certain carrier and staff jumping for glee!

There were two carriers jumping for glee when Ansett collapsed. The pilots who had been with Impulse were also clapping and cheering when Ansett went under. How do I know that? They were still quite happy to tell me when I started with Jetstar.

[Ken Borough]

I witnessed st very close hand some quite senior members of the Qantas ‘Blue Team' rubbing their hands with glee and chortling like the crazies they were when Ansett was going down. I can never forget their lack of empathy and even self-awareness - ignorant bastards.

[Paragraph377]

Originally Posted by Lookleft

There were two carriers jumping for glee when Ansett collapsed. The pilots who had been with Impulse were also clapping and cheering when Ansett went under. How do I know that? They were still quite happy to tell me when I started with Jetstar.

Dualing swords removed for a brief moment. This is probably the only thing we will ever agree on Lookleft. I happened to be sitting in an AN flight deck jump seat on their final day of operation. I clearly recall VB ground staff on the tarmac who were turning around two of their aircraft and they were flipping us the bird and then laughing, clapping and waving goodbye. Another AN acquaintance of mine also reported a similar thing at his location with the added bonus that there were VB employees in both the fwd and aft cargo holds and they were ‘mooning’ the AN aircraft as it taxied past them on an adjacent aircraft bay.

[Lookleft]

We probably agree on more than we are willing to acknowledge but it is good to cease hostilities for the moment and reflect on the short sightedness of those who revel in another's demise. Aviation is very much a game of snakes and ladders so people need to be careful to not think that those below you are worthy of contempt and those above need to be feted as lords. I wonder what the people from VB who were so nasty at the time of Ansetts demise are doing now? The ex-Impulse pilots who so kindly pointed out that they were happy to see Ansett go under with the loss of 16000 jobs have all in one way or another moved on from flying.

[megan]

I clearly recall VB ground staff on the tarmac who were turning around two of their aircraft and they were flipping us the bird and then laughing, clapping and waving goodbye. Another AN acquaintance of mine also reported a similar thing at his location with the added bonus that there were VB employees in both the fwd and aft cargo holds and they were ‘mooning’ the AN aircraft as it taxied past them on an adjacent aircraft bay

I very much doubt the same would not have happened if the positions were reversed.