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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 6th Jul 2020, 09:52
  #141 (permalink)  
 
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We know only one of those airlines is talking about a multimillion dollar EXPANSION after receiving TAXPAYERS funds, the rest are DOWNSIZING, including their domestic fleets.
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Old 6th Jul 2020, 09:53
  #142 (permalink)  
 
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Originally Posted by aviation_enthus
77 each way each day.... Do the maths on that and you’ll understand why Rex is upset. QF are taking a route that is most likely mildly profitable for Rex and adding extra capacity.
So more demand than two full 340s/Q200s each day, seven days a week and that route is only 'likely mildly profitable'? Rex only fly that route 5 days a week. If they're not hauling in cash off that route they need a new revenue management system.

Originally Posted by aviation_enthus
... Result? Both airlines will wear a loss until the other gives up, then the people of Orange go back to a monopoly....
So this is always the bit of the Rex argument that's always interesting. Apparently monopoly routes are bad ... unless it's Rex that has the monopoly.

Originally Posted by aviation_enthus
I had an explanation but deleted it because most of the comments on here are clearly biased and can’t listen to a reasonable argument (didn’t expect anything less from Pprune TBH).
I don't have a problem with Rex per se, but I do have a problem with poor and hypocritical arguments.


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Last edited by MickG0105; 6th Jul 2020 at 09:55. Reason: Format
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Old 6th Jul 2020, 10:27
  #143 (permalink)  
 
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Originally Posted by MickG0105
So more demand than two full 340s/Q200s each day, seven days a week and that route is only 'likely mildly profitable'? Rex only fly that route 5 days a week. If they're not hauling in cash off that route they need a new revenue management system.


So this is always the bit of the Rex argument that's always interesting. Apparently monopoly routes are bad ... unless it's Rex that has the monopoly.


I don't have a problem with Rex per se, but I do have a problem with poor and hypocritical arguments.


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Ok Iíll help.

77 passengers each way every day of the week.

Rex (Pre Covid) ran 3-4 services a day to Sydney. Fly Corporate ran limited services to MEL/BNE.

77 x 2 = 154 pax
154 x 7 = 1078 per week
minus fly corporate (say 15-20 per flight x 4 sectors) = 1010
Across 6-8 individual Rex sectors daily: 1010/48 sectors = 21 pax average per sector on Rex

34 seat Saab, 21 pax = 61% load factor. I think their average across the whole network is the high 50ís, so hardly Ďprofit gougingí.

If QF want to offer a reasonable schedule, theyíll have to go 2x daily Monday to Friday. Thatís an extra 20 sectors a week.

Lets assume the market grows by 20%. 1010 pax becomes 1200/week. Divide that by 68 sectors and now you get 17 pax per sector. If it doesnít grow now weíre looking at 14 pax per sector.

So like I said both companies wear a loss until one pulls out. Back to monopoly.

I never (and I donít think Rex have either) have said that they donít want competition. But SOME regional routes WILL NOT SUPPORT competition in the sense of two viable companies. There is simply not enough demand to support two efficient companies. Thatís why until recently most of the states restricted competition (yes a monopoly) to the smaller towns.

By all means expose Rex to competition, after all thatís the point of a capitalist economy. But donít try and tell me this wonít result in the SYD-OAG route going back to a monopoly when one carrier pulls out. Thatís the point Iím making.
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Old 6th Jul 2020, 11:11
  #144 (permalink)  
 
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Originally Posted by aviation_enthus
Ok Iíll help.

77 passengers each way every day of the week.

Rex (Pre Covid) ran 3-4 services a day to Sydney. Fly Corporate ran limited services to MEL/BNE.

77 x 2 = 154 pax
154 x 7 = 1078 per week
minus fly corporate (say 15-20 per flight x 4 sectors) = 1010
Across 6-8 individual Rex sectors daily: 1010/48 sectors = 21 pax average per sector on Rex

34 seat Saab, 21 pax = 61% load factor. I think their average across the whole network is the high 50ís, so hardly Ďprofit gougingí.

If QF want to offer a reasonable schedule, theyíll have to go 2x daily Monday to Friday. Thatís an extra 20 sectors a week.

Lets assume the market grows by 20%. 1010 pax becomes 1200/week. Divide that by 68 sectors and now you get 17 pax per sector. If it doesnít grow now weíre looking at 14 pax per sector.

So like I said both companies wear a loss until one pulls out. Back to monopoly.

I never (and I donít think Rex have either) have said that they donít want competition. But SOME regional routes WILL NOT SUPPORT competition in the sense of two viable companies. There is simply not enough demand to support two efficient companies. Thatís why until recently most of the states restricted competition (yes a monopoly) to the smaller towns.

By all means expose Rex to competition, after all thatís the point of a capitalist economy. But donít try and tell me this wonít result in the SYD-OAG route going back to a monopoly when one carrier pulls out. Thatís the point Iím making.
Thanks for the sums. Rex's network load factor is 62.5 percent.

3-4 services a day. It strikes me that would be first thing that would come under review rather than this all-or-nothing approach.

But in any event if we're back to the monopoly route argument then you can surely see the subjectivity problem with arguing that the current monopoly is acceptable (ostensibly because Rex has it) whereas a future monopoly would be unacceptable (ostensibly because Qantas would have it).
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Old 6th Jul 2020, 12:15
  #145 (permalink)  
 
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QF flights also have lots of on-carriage vs REX point to point
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Old 6th Jul 2020, 12:24
  #146 (permalink)  
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Canít wait, for a rex NB fleet Competing with QF. 10 Airframes is hardly a threat as we witnessed with the Singapore bankrolled TT Experiment.
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Old 6th Jul 2020, 22:07
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The QF guys questioning the numbers and motives of REX management, that’s cute, terminally cute.
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Old 6th Jul 2020, 22:13
  #148 (permalink)  
 
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I can't wait for REX to complain to government because they haven't been given a fair go on the triangle by QF and VA.
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Old 6th Jul 2020, 22:57
  #149 (permalink)  
 
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Originally Posted by Left 270
The QF guys questioning the numbers and motives of REX management, thatís cute, terminally cute.
The questions are valid, but posed as a taxpayer. If Rex was able to generate funding for a fleet expansion they certainly didnít need survival funds from the taxpayer. Someone owes me a couple of bucks.

What Rex does with ten jets, no lounges and second rate terminals is up to them. Except thatís not the end game, is it? I imagine they will shed crocodile tears when it all goes wrong and expect their mate to somehow subsidise their operation for the sake of fairness, competition, the battler, the flag, the whole vibe of thing.

$30 million for a jet operation goes away pretty quickly. Even if Rex had the AOC and admin in place, ten jets would eat that in about ten weeks
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Old 6th Jul 2020, 23:39
  #150 (permalink)  
 
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Originally Posted by Australopithecus
The questions are valid, but posed as a taxpayer. If Rex was able to generate funding for a fleet expansion they certainly didnít need survival funds from the taxpayer. Someone owes me a couple of bucks.
That is particularly so when you consider the stated purpose and eligibility criteria for the Regional Airline Funding Assistance grant program.

The objective of this Grant Opportunity is to assist:
  • domestic commercial airlines operating Regular Public Transport services to regional and remote locations, and
  • a range of essential services air operators,
with cashflow to assist them maintain essential air links during the COVID-19 period, subject to eligibility and analysis of the organisationís financial situation. The funding is seen as a Ďlast resortí option when a range of other strategies to manage an airlineís position have been undertaken.
Emphasis on 'last resort'. Clearly Rex had not undertaken the most basic of the 'other strategies' available to them; a capital raising via debt using fleet as security. To the extent that they needed a template for that, they just needed to pick up a newspaper on 25 March and read about what Qantas did.
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Old 7th Jul 2020, 00:13
  #151 (permalink)  
 
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A forum full of dudes with no idea how big businesses are run. Screams of hypocrisy, crocodile tears. Both CEOs are doing exActly what they should be doing, running businesses using any leverage they can to make it work. Pleasing a bunch of unsavvy dudes on pprune isn't taught st business school
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Old 7th Jul 2020, 00:14
  #152 (permalink)  
 
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Nobody likes a whinger, particularly the continual ******* whinge from rex.
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Old 7th Jul 2020, 02:10
  #153 (permalink)  
 
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Ozbiggles, ALL airlines at this stage are receiving taxpayer funds, and at this stage REX has NOT expanded its in the same position as everybody else
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Old 7th Jul 2020, 02:12
  #154 (permalink)  
 
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Originally Posted by rodney rude
A forum full of dudes with no idea how big businesses are run. Screams of hypocrisy, crocodile tears. Both CEOs are doing exActly what they should be doing, running businesses using any leverage they can to make it work. Pleasing a bunch of unsavvy dudes on pprune isn't taught st business school
I frankly expect (often in vain) any CEO to not try to game the system during a thing like a century pandemic. I certainly expect a cabinet minister to exercise some fiduciary responsibility: another expectation dashed all too often.
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Old 7th Jul 2020, 03:13
  #155 (permalink)  
 
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Austy I could not agree more. The relevant ministers in any situation like this and in any industry need to take advice, and act appropriately and legally with no favouritism and in the country's best interest. But were any of us to be running any of these company's we would also be doing what is needed to ensure the best outcome for our company. And if we did not do that because Normanton or anyone else here might call "whinger"- well that would be very remiss of the CEO charged with keeping his company alive.
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Old 7th Jul 2020, 07:03
  #156 (permalink)  
 
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It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will
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Old 7th Jul 2020, 07:09
  #157 (permalink)  
 
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Originally Posted by Arnold E
It could be pointed out that at least some of the people here whinging about REX getting a taxpayer handout are probably themselves getting a tax payer handout in the form of jobkeeper. Now I could ask, since I'm still working and paying tax, why should I be supporting you sitting at home doing nothing. I could say that.........maybe I will
Can you actually read the thread properly and the facts that have been pointed out NUMEROUS times

People arenít complaining about the fact they got a handout.

They are complaining about the fact they cried wolf, got a healthy government handout AND THEN proceeded to raise capital to start a jet operation.

If you canít see how that differs to someone on jobkeeper, youíve got rocks in your head.
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Old 7th Jul 2020, 07:17
  #158 (permalink)  
 
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Arnold, are you actually retired as you say you are in your post #112 or are you still working. At least we do know that you are full of sh*t!
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Old 7th Jul 2020, 07:25
  #159 (permalink)  
 
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Originally Posted by Deejaypee
Arnold, are you actually retired as you say you are in your post #112 or are you still working. At least we do know that you are full of sh*t!
Anything useful to say or are you just here for character assassination?

No relevant facts to support Ďfull of s***í.
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Old 7th Jul 2020, 07:29
  #160 (permalink)  
 
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He did say he was retired. Now heís not. Without the ďcharacter assassinationĒ as you put it, itís difficult to understand whatís heís on about. You know what they say about drowning men.
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