REX to transition to ATRs, start domestic jet ops
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.
Last edited by MickG0105; 6th Jul 2020 at 08:55. Reason: Format
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.
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.
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 50’s, so hardly ‘profit gouging’.
If QF want to offer a reasonable schedule, they’ll have to go 2x daily Monday to Friday. That’s 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 doesn’t grow now we’re 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 don’t think Rex have either) have said that they don’t 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. That’s 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 that’s the point of a capitalist economy. But don’t try and tell me this won’t result in the SYD-OAG route going back to a monopoly when one carrier pulls out. That’s the point I’m making.
Ok I’ll 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 50’s, so hardly ‘profit gouging’.
If QF want to offer a reasonable schedule, they’ll have to go 2x daily Monday to Friday. That’s 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 doesn’t grow now we’re 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 don’t think Rex have either) have said that they don’t 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. That’s 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 that’s the point of a capitalist economy. But don’t try and tell me this won’t result in the SYD-OAG route going back to a monopoly when one carrier pulls out. That’s the point I’m making.
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 50’s, so hardly ‘profit gouging’.
If QF want to offer a reasonable schedule, they’ll have to go 2x daily Monday to Friday. That’s 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 doesn’t grow now we’re 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 don’t think Rex have either) have said that they don’t 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. That’s 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 that’s the point of a capitalist economy. But don’t try and tell me this won’t result in the SYD-OAG route going back to a monopoly when one carrier pulls out. That’s the point I’m making.
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).
What Rex does with ten jets, no lounges and second rate terminals is up to them. Except that’s 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
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,
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
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
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.
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
Join Date: Jul 2020
Location: Sunshine state
Posts: 9
Likes: 0
Received 0 Likes
on
0 Posts
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
People aren’t 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 can’t see how that differs to someone on jobkeeper, you’ve got rocks in your head.
Join Date: Sep 2011
Location: Unfortunately not the Orient
Posts: 387
Likes: 0
Received 88 Likes
on
32 Posts
He did say he was retired. Now he’s not. Without the “character assassination” as you put it, it’s difficult to understand what’s he’s on about. You know what they say about drowning men.
