REX AIRLINES Trading Halt
Joined: Apr 2010
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From: Brisbane
Joined: May 2016
Aviation Qualifications: PPL
Posts: 1,537
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From: Sunshine Coast
You certainly get the feeling that Rex has just been incinerating cash over the past six months. All these emerging stories of unpaid bills are indicative of negative net operating cash flow. The first meeting of creditors should be next Friday or the following Monday, so we'll have a clearer picture then.
Last edited by MickG0105; 31st July 2024 at 09:06. Reason: Clarification on cash flow
Joined: Dec 2023
Posts: 18
Likes: 7
From: Nowhere of Notice
https://www.afr.com/street-talk/houl...0240730-p5jxkw
Appears that EY might try selling the airline; Question is, who'd buy it? Virgin could want to kickstart their regional op again.
Regional Express administrator EY is expected to work with investment bank Houlihan Lokey to run a sale process for the embattled airline, Street Talk can reveal.
It comes after Rex’s private equity backer, PAG Asia Capital, funded new money to the administrator on Wednesday to allow the regional flights division of Rex to go into administration, according to sources with direct knowledge of the situation.
PAG has put new capital into Regional Express. Not-For-SyndicationEY is working with law firm White & Case, the sources said. The advisers are understood to be preparing the entire company – barring the already closed capital cities divisions – for a sale.
It remains to be seen what deal structure, and at what terms, PAG will push for at Rex. The Pan-Asian private equity firm is sitting on $150 million worth of convertible notes debt. It is unclear how much more PAG has now coughed up for Rex, although sources noted it is sufficient to keep regional customers in the air.
PAG, led by Hong Kong partner Lincoln Pan, is understood to have pushed for Rex’s board to spare units that are standalone profitable, such as the fly in, fly out contractor division, from the administration proceedings.
In January 2021, PAG invested $150 million in Rex to help it launch major city jet operations. Under the deal, the notes had an initial term of five years, and entitled PAG to earn 4 per cent per annum in interest and convert into equity at $1.50 a share. Rex shares last changed hands at 56¢ apiece, before it entered a trading halt on Monday.
At December 31, Rex had used up $120 million in total from the PAG convertible notes, which are first-ranking senior secured debt. Westpac has also provided a $175 million debt facility to Rex, of which the carrier had used $169.9 million at end of 2023.
The two lenders have security over different pools of assets.
It comes after Rex’s private equity backer, PAG Asia Capital, funded new money to the administrator on Wednesday to allow the regional flights division of Rex to go into administration, according to sources with direct knowledge of the situation.
PAG has put new capital into Regional Express. Not-For-SyndicationEY is working with law firm White & Case, the sources said. The advisers are understood to be preparing the entire company – barring the already closed capital cities divisions – for a sale.It remains to be seen what deal structure, and at what terms, PAG will push for at Rex. The Pan-Asian private equity firm is sitting on $150 million worth of convertible notes debt. It is unclear how much more PAG has now coughed up for Rex, although sources noted it is sufficient to keep regional customers in the air.
PAG, led by Hong Kong partner Lincoln Pan, is understood to have pushed for Rex’s board to spare units that are standalone profitable, such as the fly in, fly out contractor division, from the administration proceedings.
In January 2021, PAG invested $150 million in Rex to help it launch major city jet operations. Under the deal, the notes had an initial term of five years, and entitled PAG to earn 4 per cent per annum in interest and convert into equity at $1.50 a share. Rex shares last changed hands at 56¢ apiece, before it entered a trading halt on Monday.
At December 31, Rex had used up $120 million in total from the PAG convertible notes, which are first-ranking senior secured debt. Westpac has also provided a $175 million debt facility to Rex, of which the carrier had used $169.9 million at end of 2023.
The two lenders have security over different pools of assets.
Joined: May 2016
Aviation Qualifications: PPL
Posts: 1,537
Likes: 695
From: Sunshine Coast
https://www.afr.com/street-talk/houl...0240730-p5jxkw
Appears that EY might try selling the airline; Question is, who'd buy it? Virgin could want to kickstart their regional op again.
Appears that EY might try selling the airline; Question is, who'd buy it? Virgin could want to kickstart their regional op again.
Joined: Jun 2001
Posts: 786
Likes: 52
From: .
No one is denying they service some routes that offer a real connection to the world for regional people.
But from a outside party interest stake
The fleet is cooked - all over 30 years old - with no decent engineering contracts in place to keep said fleet operational(re engine overhaul contracts etc)
They don't have enough crew to keep the operation running - with all the above new surely even lifers that had no thoughts of leaving are looking at leaving, seem to have a lack of trainers and checkers left on the Saab to improve this situation as well
Anyone buying needs to have a proposal to get in, replace the fleet, improve morale, get crew numbers up, then basically buy an entirely new fleet.
Are you going to get your return on investment in order to do all of the above ?
I think even the author of 'project mother' would struggle to get that business case to look like anything other than a fiction piece.
Surely if you were keen on the remains of the Rex regional operation that you'd wait for it to fail then pick up what works for your operation.....why buy something thats too wrecked to bother fixing ? I guess we will find out.
As always, I feel for the people at the coal face, their 'lack of' management is to blame for all of the above.
At what cost does the government keep the above cluster operational just to service the public ?
But from a outside party interest stake
The fleet is cooked - all over 30 years old - with no decent engineering contracts in place to keep said fleet operational(re engine overhaul contracts etc)
They don't have enough crew to keep the operation running - with all the above new surely even lifers that had no thoughts of leaving are looking at leaving, seem to have a lack of trainers and checkers left on the Saab to improve this situation as well
Anyone buying needs to have a proposal to get in, replace the fleet, improve morale, get crew numbers up, then basically buy an entirely new fleet.
Are you going to get your return on investment in order to do all of the above ?
I think even the author of 'project mother' would struggle to get that business case to look like anything other than a fiction piece.
Surely if you were keen on the remains of the Rex regional operation that you'd wait for it to fail then pick up what works for your operation.....why buy something thats too wrecked to bother fixing ? I guess we will find out.
As always, I feel for the people at the coal face, their 'lack of' management is to blame for all of the above.
At what cost does the government keep the above cluster operational just to service the public ?
Joined: Dec 2023
Posts: 18
Likes: 7
From: Nowhere of Notice
Joined: Feb 2024
Posts: 43
Likes: 33
From: Australia
Do we expect many of the 737 drivers to move back to the Saab fleet to improve supply of C&T or even just line captains? Or will most try and head to VA/JQ?
I’m not sure of the ratio of Saab pilots who moved to the 737 vs. directly hired to the jets…
I’m not sure of the ratio of Saab pilots who moved to the 737 vs. directly hired to the jets…
Joined: Jun 2001
Posts: 786
Likes: 52
From: .
Surely any that do go back would only go back until their start date somewhere else.....
Joined: Dec 2023
Posts: 18
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From: Nowhere of Notice
From what I hear; REx doesn’t have an internal process for 737 drivers. All direct.
Joined: Feb 2024
Posts: 43
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From: Australia
Looks like they were right…
Joined: Mar 2016
Posts: 99
Likes: 1
From: Queensland
At least in NSW, there's nowhere Rex fly that isn't served by the regional rail & coach network, so there is a (slower) alternative if they do go belly-up. SA seems to be covered by a couple of bus operators and Queensland look to have Greyhound servicing their towns so it's not as if these communities will be left isolated - their residents might need to plan longer travel times is all.
Joined: Mar 2018
Posts: 183
Likes: 82
From: Anvya
How long until a slick entrepreneur sees an opportunity to find investors , an aircraft manufacture who’s desperate to get their newest old aircraft on Australian register , then declares there is an opportunity to fill a gap in the Australian airline scene that’s not there , Take on virgin and Qantas by flooding market with cheap introductory airfares , slick advertising with young , stars in their eyes staff .
6 months ? 12 months ? Only thing I know for certain is there will be more . 🤣🤣
6 months ? 12 months ? Only thing I know for certain is there will be more . 🤣🤣
Joined: Jan 2009
Posts: 1,415
Likes: 431
From: Cab of a Freight Train
Hell, it might even prompt the Government to invest more in the regional rail & coach network for the benefit of everyone along the route, not just at the end. Dreamin' I know...That being said, I've always thought Rex could make money out of their regional services. Captive market. Fully depreciated fleet. Minimal competition and so on.
Joined: Jul 2007
Posts: 2,444
Likes: 290
From: Australia
The dreamers will be busy working the phones, talking to the politicians, local councils how they will be starting up a new regional airline. We saw that when Hazeltons and Kendall’s stopped in 2001.
Our fifty year old Chieftain is just like a Saab 340, it’s low wing and has two engines. It will be crewed by our highly competent pilots that far exceed CASA standards, we will offer a reliable service subject to regular breakdowns at some remote outport. Our outsourced engineering department is staffed by people that will ensure no aeroplane will leave the hangar until the 90 day account is paid in full and the cheque has been cleared.
Remember when Hazelton’s had a big downsizing in the early 90’s and the likes of Monarch Airlines appeared overnight. Somebody else was running a Queenair on RPT at one stage.
Stay safe Rex Saab drivers!
Our fifty year old Chieftain is just like a Saab 340, it’s low wing and has two engines. It will be crewed by our highly competent pilots that far exceed CASA standards, we will offer a reliable service subject to regular breakdowns at some remote outport. Our outsourced engineering department is staffed by people that will ensure no aeroplane will leave the hangar until the 90 day account is paid in full and the cheque has been cleared.
Remember when Hazelton’s had a big downsizing in the early 90’s and the likes of Monarch Airlines appeared overnight. Somebody else was running a Queenair on RPT at one stage.
Stay safe Rex Saab drivers!
Joined: Nov 2010
Posts: 258
Likes: 40
From: Perth
No one is denying they service some routes that offer a real connection to the world for regional people.
But from a outside party interest stake
The fleet is cooked - all over 30 years old - with no decent engineering contracts in place to keep said fleet operational(re engine overhaul contracts etc)
They don't have enough crew to keep the operation running - with all the above new surely even lifers that had no thoughts of leaving are looking at leaving, seem to have a lack of trainers and checkers left on the Saab to improve this situation as well
Anyone buying needs to have a proposal to get in, replace the fleet, improve morale, get crew numbers up, then basically buy an entirely new fleet.
Are you going to get your return on investment in order to do all of the above ?
I think even the author of 'project mother' would struggle to get that business case to look like anything other than a fiction piece.
Surely if you were keen on the remains of the Rex regional operation that you'd wait for it to fail then pick up what works for your operation.....why buy something thats too wrecked to bother fixing ? I guess we will find out.
As always, I feel for the people at the coal face, their 'lack of' management is to blame for all of the above.
At what cost does the government keep the above cluster operational just to service the public ?
But from a outside party interest stake
The fleet is cooked - all over 30 years old - with no decent engineering contracts in place to keep said fleet operational(re engine overhaul contracts etc)
They don't have enough crew to keep the operation running - with all the above new surely even lifers that had no thoughts of leaving are looking at leaving, seem to have a lack of trainers and checkers left on the Saab to improve this situation as well
Anyone buying needs to have a proposal to get in, replace the fleet, improve morale, get crew numbers up, then basically buy an entirely new fleet.
Are you going to get your return on investment in order to do all of the above ?
I think even the author of 'project mother' would struggle to get that business case to look like anything other than a fiction piece.
Surely if you were keen on the remains of the Rex regional operation that you'd wait for it to fail then pick up what works for your operation.....why buy something thats too wrecked to bother fixing ? I guess we will find out.
As always, I feel for the people at the coal face, their 'lack of' management is to blame for all of the above.
At what cost does the government keep the above cluster operational just to service the public ?
They still did the job like the Saabs. But old aircraft....the cost adds up
Joined: Jul 2008
Aviation Qualifications: ATPL
Posts: 141
Likes: 12
From: Safely locked away
Perhaps this might be just the opening QATAR are looking for, prop up REX regional in return for domestic access.
The longer term outlook without a suitable Saab replacement looks challenging though.
The longer term outlook without a suitable Saab replacement looks challenging though.
Joined: Nov 2010
Posts: 258
Likes: 40
From: Perth