REX to transition to ATRs, start domestic jet ops
Join Date: Dec 2006
Location: australia
Posts: 916
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 $$ you can't sustain the unsustainable.
Clearly the incumbents offer enough so that REX have not established a presence ML-SY-ML and probably won't....for now.
Only hope would appear to swing into the Tiger leisure market, maybe try and develop new/under served routes and then maybe....maybe have another go at the golden triangle later with better brand recognition.
Unless there's a desire or need to lose XXXX amount of $$ you can't sustain the unsustainable.
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.
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.
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
https://www.9now.com.au/today/2021/c...0s0ip1n9sb2vnb
JS just on 3AW and told some classic porkies.
- 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.
- 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.
- 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.
JS just on 3AW and told some classic porkies.
- 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.
- 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.
- 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.
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!
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!
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 04:54. Reason: Tidy up
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.
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.
Join Date: Jan 2006
Location: Sydney
Posts: 191
Likes: 0
Received 0 Likes
on
0 Posts
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.
Their leases are 25k per month for each aircraft. Is that quite cheap? Understandably that is only one cost of many.
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.
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.
Judging by lead-in fares for the next couple of days it appears that VA have mostly sold their $39 fares whereas Rex’s cheapies are still for sale. Make of that what you will.
