rex Celebrating 20 Years
Last edited by MickG0105; 16th Oct 2022 at 04:26. Reason: Typo, correction re NJS/NJE
Looking at the how Cobham fly the E190's it's hard to see where they are going to fit in a potentially 7 hr round trip to ADL with any sort of decent frequency and redundancy (both to their Pax and FIFO routes) in the supposed down time the aircraft have, considering the economic and contractual forces on honouring a FIFO contract.
Of course GT from airlineratings.com would have asked those hard questions. That's such a back yard organization. Their passenger REX reviews/ratings consist of 6, only 2 of which are within the last 2 years. Have a look at the "team of aviation editors" who make up the rest of the ratings team.
Of course GT from airlineratings.com would have asked those hard questions. That's such a back yard organization. Their passenger REX reviews/ratings consist of 6, only 2 of which are within the last 2 years. Have a look at the "team of aviation editors" who make up the rest of the ratings team.
NJS (National Jet Systems) is the business unit that operates the 717s, sold to QF a few years ago.
Looking at the how Cobham fly the E190's it's hard to see where they are going to fit in a potentially 7 hr round trip to ADL with any sort of decent frequency and redundancy (both to their Pax and FIFO routes) in the supposed down time the aircraft have, considering the economic and contractual forces on honouring a FIFO contract.
NJE.
NJS (National Jet Systems) is the business unit that operates the 717s, sold to QF a few years ago.
With the current fleet they're practically restricted to Friday evening through to Sunday night flying for those suggested routes. Works pretty much solely for the "get away for the weekend" crowd and no one else.
NJS (National Jet Systems) is the business unit that operates the 717s, sold to QF a few years ago.
With the current fleet they're practically restricted to Friday evening through to Sunday night flying for those suggested routes. Works pretty much solely for the "get away for the weekend" crowd and no one else.
Still wondering how Rex is going to fund this expansion, their jets are fairly idle between capital cities on the weekend, their share price has gone from flatlining post financial results announcement to dropping almost 6% (in the same period QF went up
22%, despite Deano’s predictions they’re up the proverbial creek). Does Rex give any profit advice updates to the market, it should be about time for one……
Yeah that ain’t going to work for red eye ops or an ADL return weekend only, unless they want to become an ULCC, emphasis on the Ultra.
Still wondering how Rex is going to fund this expansion, their jets are fairly idle between capital cities on the weekend, their share price has gone from flatlining post financial results announcement to dropping almost 6% (in the same period QF went up
22%, despite Deano’s predictions they’re up the proverbial creek). Does Rex give any profit advice updates to the market, it should be about time for one……
Still wondering how Rex is going to fund this expansion, their jets are fairly idle between capital cities on the weekend, their share price has gone from flatlining post financial results announcement to dropping almost 6% (in the same period QF went up
22%, despite Deano’s predictions they’re up the proverbial creek). Does Rex give any profit advice updates to the market, it should be about time for one……
Who is going to bankroll all this expansion? On the NJE side the Chair appears to have stumped up the funds as the Rex group has no financial ability. On the Rex front, according to the latest report, they have exhausted half the PAG loan. Now that was nearly 4 months ago. Any 20-30 aircraft plans will need to result in a takeover or significant injection from someone. The kitty will likely be exhausted by the time the next two 737s arrive and enter service late next year.
I think some of you underestimate the funds required to get to a 20-30 aircraft operation. Rex just don't have the cash.
I think some of you underestimate the funds required to get to a 20-30 aircraft operation. Rex just don't have the cash.
Back in early August, astoundingly with only a month of unaudited FY23 trading under their belt, Rex came out with this "Profit Guidance". Notably, the document is entirely devoid of any actual guidance as to expected profit. The closest you get to 'guidance' is the caveated statement that Rex '... believe that both our domestic and regional operations will be profitable this FY'. That's it. Needless to say that the market treated the announcement as you'd expect - it did essentially nothing to share price.
Whether Rex intended it or not, the fact that they stated their actual revenue from jet ops for the month of July and stated their load factor for the month did allow for further calculations. Given their relatively simple route and schedule structure for the month it wasn't difficult to calculate available seat kilometres, revenue per available seat kilometre, total pax carried and average revenue per pax. RASK was about 11.5 cents and average revenue per pax was around $103.50. For what was purportedly a "sterling start"/"phenomenal performance", neither of those numbers are anything to write home about.
Likely because market analysts know bullsh!t when they see it. Touting percentage improvements on an unknown, but likely very poor, baseline (Rex's performance for June 2022) isn't going to get anyone excited.
Same same with frankly inane statements such as,
Well, duh! October is generally the strongest month of the year for domestic aviation, and is always a stronger month than September, routinely in the order of 8.0 - 8.5 percent stronger.
Same same with frankly inane statements such as,
Encouragingly, October 2022 appears to be even stronger than September 2022 ...
Anyone playing the stockmarket knows that punters react in baffling ways. The fact that a profit is predicted will not always be reflected in a positive share bounce. You can't read into a share price fall
anything beyond market nuances. This is simply not enough to throw mud at Rex. It's the stockmarket. I've had big wins and big losses on the market over the years - and whilst I think Mick G is spot on, much of Sharpey's media rhetoric is thrown squarely at the stock market volatility - I've backed many a "winning company" and watched my money tumble.
anything beyond market nuances. This is simply not enough to throw mud at Rex. It's the stockmarket. I've had big wins and big losses on the market over the years - and whilst I think Mick G is spot on, much of Sharpey's media rhetoric is thrown squarely at the stock market volatility - I've backed many a "winning company" and watched my money tumble.
QF, BHP and the other big players stocks always just ride up on the market, they are institutional investor staples, QF would have to announce administration to go backwards in any serious manner outside the normal movement of the ASX. Rex has so few freehold shares that its almost impossible to know if it's new trades or just employees selling stocks for cash all pretty low volumes. I'd say Rex shares are better for the regular fully franked dividends than any price appreciation.
As for profits VA usually made all its profits in the first half, and then slumped into losses in the second due weak demand in Australia post summer holidays through to June, with a small spike in Easter. QF has a slightly broader spectrum with is business custom and loyalties, but follows a similar trend. Regional operations are a bit more stable through out the year, with summer holidays actually being a low point in operations due to waning of commuter traffic.
As for Rex I've heard the marketing tie ups have been awesome for them with long term bookings through the roof, just need more fleet to service it reliably.
As for profits VA usually made all its profits in the first half, and then slumped into losses in the second due weak demand in Australia post summer holidays through to June, with a small spike in Easter. QF has a slightly broader spectrum with is business custom and loyalties, but follows a similar trend. Regional operations are a bit more stable through out the year, with summer holidays actually being a low point in operations due to waning of commuter traffic.
As for Rex I've heard the marketing tie ups have been awesome for them with long term bookings through the roof, just need more fleet to service it reliably.
Last edited by 43Inches; 25th Oct 2022 at 00:05.
If you want to understand why the market reacted one way to Qantas's recent market update and a different way to Rex's update, you need only look at the substance of each.
While there's plenty of spin and fluff in the QF announcement, there's a solid core of factual financial information. For starters, QF actually nominate their 1H23 Underlying Profit Before Tax expectations within a fairly tight range; $1.2 - $1.3 billion. They also provide firm guidance on net debt.
The Rex announcement, on the other hand, is essentially nothing but spin and fluff. There is a marked credibility gap between saying you expect to be profitable in FY23 versus stating actual expectations for 1H as dollar amounts. And the market reacts accordingly.
There's also the matter of comparing what a company says to what you see it doing. For all Rex's talk about "strong demand" driving fleet expansion, what the market sees currently is Rex flying essentially the same schedule in late October with seven jets as they were in late August with only six jets; 198 flights for the week ending 23 October versus 196 flights for the week ending 21 August.
Pax numbers and load factors are much improved, for sure, but utilisation is pretty bloody ordinary; utilisation has declined since they added -MFM. With the talk of being in the market for another two jets, there would undoubtedly be some nervousness around Rex getting too far ahead of itself in terms of capacity.
While there's plenty of spin and fluff in the QF announcement, there's a solid core of factual financial information. For starters, QF actually nominate their 1H23 Underlying Profit Before Tax expectations within a fairly tight range; $1.2 - $1.3 billion. They also provide firm guidance on net debt.
The Rex announcement, on the other hand, is essentially nothing but spin and fluff. There is a marked credibility gap between saying you expect to be profitable in FY23 versus stating actual expectations for 1H as dollar amounts. And the market reacts accordingly.
There's also the matter of comparing what a company says to what you see it doing. For all Rex's talk about "strong demand" driving fleet expansion, what the market sees currently is Rex flying essentially the same schedule in late October with seven jets as they were in late August with only six jets; 198 flights for the week ending 23 October versus 196 flights for the week ending 21 August.
Pax numbers and load factors are much improved, for sure, but utilisation is pretty bloody ordinary; utilisation has declined since they added -MFM. With the talk of being in the market for another two jets, there would undoubtedly be some nervousness around Rex getting too far ahead of itself in terms of capacity.
There's also the matter of comparing what a company says to what you see it doing. For all Rex's talk about "strong demand" driving fleet expansion, what the market sees currently is Rex flying essentially the same schedule in late October with seven jets as they were in late August with only six jets; 198 flights for the week ending 23 October versus 196 flights for the week ending 21 August.
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One doing a C check and another being a hangar queen, so schedules have been a bit loose. Again small fleet issues at the moment, can't get anything useful from stats other than loads are definitely on the up. Meanwhile everyone else is doing well at a time they should be doing well, we'll know more in Feb when half yearlies come up, other than that its all fluff and nonsense, as all airlines can bend the stats at present to suit the perfect scenario at this time of year. What I do see is some big marketing campaigns ramping up at VA and QF, that would indicate that they want more from future trends on bookings, ie the covid release is winding down and they need to do more for forward bookings. If the future trends were showing stability they would not be spending big on TV campaigns. QF is also going to need to do something about it's corner in Mascot, its horribly congested on the best of days, especially with the added regional flights, Rex is also using the hanagars down there for maintenance, so it's only adding to the congestion as they tow stuff around.
AJ can throw out any guidance he wants, it all ups his huge paypacket he's looking forward to come end year, he will probably retire then and head off to ireland where ASIC can't touch him as the fallout starts to descend in the years coming. VA was all rosy and next year profits, then suddenly in administration, although everyone that could read their financials knew it was coming more than 10 years ago. QF still has huge issues moving forward, not the least of which is no more large assets to sell off, other than the loyalty program itself, which makes most of the group profit, which will spell the end really if they went that route. Posting large profit this financial year when its all on pre-sold tickets, that were then told to pay more per flight to use on top of $2 bill of gov assistance, that's still to play out. With the likes of Harvey Norman and such paying back their taxpayer slices it's going to be hard for the airlines to post big profits and not be under pressure pay back their share. Rex is probably smart to keep its head down and post small losses for a few years.
AJ can throw out any guidance he wants, it all ups his huge paypacket he's looking forward to come end year, he will probably retire then and head off to ireland where ASIC can't touch him as the fallout starts to descend in the years coming. VA was all rosy and next year profits, then suddenly in administration, although everyone that could read their financials knew it was coming more than 10 years ago. QF still has huge issues moving forward, not the least of which is no more large assets to sell off, other than the loyalty program itself, which makes most of the group profit, which will spell the end really if they went that route. Posting large profit this financial year when its all on pre-sold tickets, that were then told to pay more per flight to use on top of $2 bill of gov assistance, that's still to play out. With the likes of Harvey Norman and such paying back their taxpayer slices it's going to be hard for the airlines to post big profits and not be under pressure pay back their share. Rex is probably smart to keep its head down and post small losses for a few years.
I think two things are at play here, one is cheap lease 737 availability and crewing. That's holding back any major ramp up in scheduling. The air travel world recovered from Covid way faster than anyone could predict and the carnage many said would happen in airlines going broke just didn't happen and therefore there's the opposite of a glut in airliners available. VA is just lucky they were able to get most of their fleet back before Rex snaffled them up, otherwise they would have been up the creek with no boats to paddle. This is going to affect Bonza as well significantly, I've heard lease rates on the available Max fleet has tripled in a few months, now not far off $1mil per month.
