REX AIRLINES Trading Halt
Joined: Jan 2009
Posts: 1,415
Likes: 431
From: Cab of a Freight Train
For all those saying "But Rex provide a critical service, without them, XYZ will happen!" where does it end? How much taxpayer money is "too much" to give them to keep them afloat? Another $10? $20? $100M? The previous government gave a ****load to the likes of Harvey Norman, Qantas and other's during Covid with no requirement to repay it, and we'll likely be in debt until my grandkids retire from the workforce paying it off. I didn't agree with that, and I don't agree with bailing out Rex now. Certainly not without taking some kind of ownership or stake in the company in return for the $$.
Rex rolled the dice without a backup plan, and they lost. It's a shame, but that's business. They had a sound business model going, and took the punt they would do what VB did when Ansett went belly up. It didn't pay off and they had no alternative if VA kept going.
I genuinely feel for the crew, from cabin & tech to the ginger-beer's, and I suspect the Saab operation will be found to be financially viable, at least for another few years until a fleet replacement program is no longer wanted but required. If Rex was making money on a route, were it not for the 737 gamble, Link or someone else can step in to fill the gap and they can earn the profits.
But Government cannot be expected to fund every bad business decision made by a company, no matter what industry it is.
Rex rolled the dice without a backup plan, and they lost. It's a shame, but that's business. They had a sound business model going, and took the punt they would do what VB did when Ansett went belly up. It didn't pay off and they had no alternative if VA kept going.
I genuinely feel for the crew, from cabin & tech to the ginger-beer's, and I suspect the Saab operation will be found to be financially viable, at least for another few years until a fleet replacement program is no longer wanted but required. If Rex was making money on a route, were it not for the 737 gamble, Link or someone else can step in to fill the gap and they can earn the profits.
But Government cannot be expected to fund every bad business decision made by a company, no matter what industry it is.
Joined: May 2016
Aviation Qualifications: PPL
Posts: 1,537
Likes: 695
From: Sunshine Coast
For the record, I just tried to have the following posted as a comment on The Australian under their All options open for Rex but ALP wants say story;
REJECTED inside of a minute, something of a record I think.
It is probably high time for someone to focus on the incompetent management and board dysfunction at Rex that led to this corporate disaster. That crew came up with the highly risky idea of launching jet operations, that was then poorly planned, and incompetently executed.
Warning bells have been ringing for a year or more. Anyone who took the time to look at the details in Rex's financial reporting and do just a modicum of digging, could see a bad situation getting progressively worse.
Where is the fellow who conceived, planned and delivered this largely unmitigated disaster, the recently deposed executive chairman and CEO, Lim Kim Hai? Many of us remember that back in 2020, within just a few weeks of Virgin having entered administration with Deloitte, LKH was quite happy to provide the AFR with his views on how poorly managed Virgin had been, and what a bad job Deloitte were doing as administrators. Any words of introspection or contrition regarding his own mismanagement?
And where is Rex’s typically garrulous front man, current executive chairman John Sharp? Many of us remember Mr Sharp's 2021 pronouncement, “There has never been a better time to launch a domestic airline.”
And doubtless, as Qantas plays its part in getting stranded Rex passengers to their destinations, there would be a few Qantas executives who remember Mr Sharp's repeated and generally baseless criticisms of Qantas; his June 2021 claim that "On face value Qantas is technically insolvent ... Its unencumbered cash is insufficient to refund the tickets that are eligible for a refund" certainly must be invoking thoughts of shoes and feet, of geese and ganders.
When are those two fellows, and the rest of the Rex board, going to be held to account?
Warning bells have been ringing for a year or more. Anyone who took the time to look at the details in Rex's financial reporting and do just a modicum of digging, could see a bad situation getting progressively worse.
Where is the fellow who conceived, planned and delivered this largely unmitigated disaster, the recently deposed executive chairman and CEO, Lim Kim Hai? Many of us remember that back in 2020, within just a few weeks of Virgin having entered administration with Deloitte, LKH was quite happy to provide the AFR with his views on how poorly managed Virgin had been, and what a bad job Deloitte were doing as administrators. Any words of introspection or contrition regarding his own mismanagement?
And where is Rex’s typically garrulous front man, current executive chairman John Sharp? Many of us remember Mr Sharp's 2021 pronouncement, “There has never been a better time to launch a domestic airline.”
And doubtless, as Qantas plays its part in getting stranded Rex passengers to their destinations, there would be a few Qantas executives who remember Mr Sharp's repeated and generally baseless criticisms of Qantas; his June 2021 claim that "On face value Qantas is technically insolvent ... Its unencumbered cash is insufficient to refund the tickets that are eligible for a refund" certainly must be invoking thoughts of shoes and feet, of geese and ganders.
When are those two fellows, and the rest of the Rex board, going to be held to account?
Joined: Feb 2016
Posts: 190
Likes: 62
From: Aus
https://www.abc.net.au/mediawatch/ep...kets/104156092
I also think that there are very few journalists who even know how to read and understand a company's annual report, much less produce any quality business journalism.
Joined: Oct 2002
Aviation Qualifications: ATPL
Posts: 1,552
Likes: 775
From: The Coal Face
For the record, I just tried to have the following posted as a comment on The Australian under their All options open for Rex but ALP wants say story;
REJECTED inside of a minute, something of a record I think.
REJECTED inside of a minute, something of a record I think.
Joined: Jun 2001
Posts: 4,835
Likes: 85
From: Boldly going where no split infinitive has gone before..
Joined: Jan 2008
Posts: 10
Likes: 3
From: Australia
There something wrong with the chain of events in the last couple of weeks.
Why roll the board, for it only to go under a few days later, if the plotters knew it was going to be all over soon - why bother
My best guess is that PAG has only been dolling out the line of credit, on an absolutely just as required basis, leaving the local bank accounts pretty dry. If you have ever worked with a SIN owned company, this will be familiar. This has stifled the business as a whole, and in combination with the pressure of losses in the jet business has caused a split at Board level. JS et al have lost their **** and rolled LKH, only for PAG to then turn off the taps completely.
Game over then in a couple of days
Why roll the board, for it only to go under a few days later, if the plotters knew it was going to be all over soon - why bother
My best guess is that PAG has only been dolling out the line of credit, on an absolutely just as required basis, leaving the local bank accounts pretty dry. If you have ever worked with a SIN owned company, this will be familiar. This has stifled the business as a whole, and in combination with the pressure of losses in the jet business has caused a split at Board level. JS et al have lost their **** and rolled LKH, only for PAG to then turn off the taps completely.
Game over then in a couple of days
Joined: Jul 2003
Posts: 3,381
Likes: 532
From: Somewhere
The comments suggest Rex Regional was a sound business that ventured into a hostile territory which became the achilles heel of the organisation. The government is politically sensitive to supporting regional Australia. The solution is, don't bail Rex out with taxpayers' money, buy them out. The taxpayer will get the benefit from the acquisition of a established operation at a bargain price and services to regional Australia will be protected into the foreseeable future.
If anyone from the Departments of Industry and Finance is interested, please PM me for further details. I have a broadsheet business plan ready for assessment.
If anyone from the Departments of Industry and Finance is interested, please PM me for further details. I have a broadsheet business plan ready for assessment.
Joined: Mar 1999
Posts: 1,038
Likes: 23
From: Someday I will find a place to stop
Unlike other airlines that have gone bust in the history of Australia, Rex has quite a few subsideries. Wouldn't their 50% share of NJE be the likely first thing to be sold to get solvent again?
Joined: Oct 2018
Aviation Qualifications: Non-Aircrew
Posts: 275
Likes: 152
From: Australia
Spot on. KRviator obviously hasn’t tried to get a bus to Mornington Island lately, or a train to Northern Peninsula. Two and a bit hours by plane, vs a couple of days by car if the roads are open to the Cape or a lot longer if they’re closed. The teachers arent going to spend days driving in and out, and the kids going to boarding school in Cairns can’t either. The doctors that fly in for a week or two at a time to provide the only GP service in the more remote towns wont be adding an extra two days onto their commute - or in the event they have to, the costs will be passed on to either the locals or the taxpayer.
The doctors who depend on Rex to allow them to deliver regional care
"Rachael Cordina is never surprised when she runs into another doctor at Sydney Airport doing the early morning dash to regional NSW, mostly on a Regional Express flight.The Sydney cardiologist heads to places like Dubbo and Port Macquarie once a month to run outreach clinics for patients with rare congenital heart problems and says airline Rex, which went into voluntary administration on Tuesday, is critical to the provision of health services across Australia."https://www.smh.com.au/national/nsw/...31-p5jy3w.html
Joined: Jan 2006
Posts: 2,535
Likes: 224
From: Sydney Australia
Can’t believe the amount of of Australian public calling out for the government to save Rex on other social media.
How about the government forward the saving rex fund to the likes of Sharps or Link to actually expand and grow, instead of again propping up a company that’s wasted tax payers money in the COVID hand out and wrecked a great regional airline.
I’m all for the front line workers being saved but surely a rex 2.0 cannot have the same board members and managers to do the same again.
very convenient that nifty secured a larger payout figure just over a week ago. Board must go, gmfo must go as well as manager of network strategy and operations.
Casa also need to investigate how a company can still be safe while operating with no cash and or under the uncertainty that’s still around for all the current employees.
How about the government forward the saving rex fund to the likes of Sharps or Link to actually expand and grow, instead of again propping up a company that’s wasted tax payers money in the COVID hand out and wrecked a great regional airline.
I’m all for the front line workers being saved but surely a rex 2.0 cannot have the same board members and managers to do the same again.
very convenient that nifty secured a larger payout figure just over a week ago. Board must go, gmfo must go as well as manager of network strategy and operations.
Casa also need to investigate how a company can still be safe while operating with no cash and or under the uncertainty that’s still around for all the current employees.
Joined: Jul 2024
Posts: 574
Likes: 429
From: Outbush
For all those saying "But Rex provide a critical service, without them, XYZ will happen!" where does it end? How much taxpayer money is "too much" to give them to keep them afloat? Another $10? $20? $100M? The previous government gave a ****load to the likes of Harvey Norman, Qantas and other's during Covid with no requirement to repay it, and we'll likely be in debt until my grandkids retire from the workforce paying it off. I didn't agree with that, and I don't agree with bailing out Rex now. Certainly not without taking some kind of ownership or stake in the company in return for the $$.
Rex rolled the dice without a backup plan, and they lost. It's a shame, but that's business. They had a sound business model going, and took the punt they would do what VB did when Ansett went belly up. It didn't pay off and they had no alternative if VA kept going.
I genuinely feel for the crew, from cabin & tech to the ginger-beer's, and I suspect the Saab operation will be found to be financially viable, at least for another few years until a fleet replacement program is no longer wanted but required. If Rex was making money on a route, were it not for the 737 gamble, Link or someone else can step in to fill the gap and they can earn the profits.
But Government cannot be expected to fund every bad business decision made by a company, no matter what industry it is.
Rex rolled the dice without a backup plan, and they lost. It's a shame, but that's business. They had a sound business model going, and took the punt they would do what VB did when Ansett went belly up. It didn't pay off and they had no alternative if VA kept going.
I genuinely feel for the crew, from cabin & tech to the ginger-beer's, and I suspect the Saab operation will be found to be financially viable, at least for another few years until a fleet replacement program is no longer wanted but required. If Rex was making money on a route, were it not for the 737 gamble, Link or someone else can step in to fill the gap and they can earn the profits.
But Government cannot be expected to fund every bad business decision made by a company, no matter what industry it is.
I also feel for the remote communities that rely on Rex.
However,
The Australian tax payer should not be bailing out any foreign organisation that has failed due to apparent mismanagement.
We would first need to gift a foreign investor $150million
We would be left with an outdated fleet, no OEM engine support, a staff retention issue and debts.
We would have a fleet with significant tech issues
There would be no public trust, which would impact forward bookings.
We would need to fund a fleet replacement
We would still have the same management team
Better to let them go.
The void will be filled by Australian companies such as Sharp, Air North, Skippers, Qlink, Skytrans, Nexus etc etc
A new airline could be formed with Australian capital, and a totally new board, new post holders and new management team.
The new airline would need to be protected from predatory practices by QF and VA.
As taxpayers, why would we throw good money after bad? It doesn’t make sense.
Joined: Oct 2005
Posts: 1,599
Likes: 602
From: Australia
For the record, I just tried to have the following posted as a comment on The Australian under their All options open for Rex but ALP wants say story;
REJECTED inside of a minute, something of a record I think.
REJECTED inside of a minute, something of a record I think.
Joined: Nov 2010
Posts: 258
Likes: 40
From: Perth
That could be an option. All options are on the table to make Rex work financially - make it a leaner organisation.
Joined: Jan 2008
Posts: 300
Likes: 39
From: NQLD
Regular comments:
”get some Dash 8 -300’s!!”
Good luck finding 20-50 of these in good working order. “But QF!” They’re getting rid of theirs for the same reason they wouldn’t work for a reborn Rex, spare parts are becoming incredibly difficult to source for the classic Dash 8’s.
PLUS: 50 seats requires security. The Saab does NOT. The extra $20-$50 per person WILL make a difference to demand. Then how viable are the routes?
”no government should be in business”
I tend to agree with this, however…. Particularly in QLD and WA, the government is already in business by providing a fixed contract and most of the passengers on the regulated routes. They ARE the customer. So if an equity position was taken in Rex 2.0, some consolidation and fleet renewal takes place, the CUSTOMER (government) gets a better service and a viable company they can sell at the end. Aka Air NZ…
”let them collapse, someone else will step in”
It’s taken Rex 20 years to get to the point of dominating regional services QF won’t do. Airnorth is the only regional carrier left they haven’t beaten. O’Connor, Skytrans 1.0, Macair, Brindabella, Aero Pelican, Air South, Emu Airways, just to name a few off the top of my head. Have all gone down the tube resulting in disruption for the communities they served. Someone else will step in, but we will have 5+ years of disruption to these towns that rely on Rex services. OR the government buys Rex, consolidates the important routes (Eg no other provider) and then sells it to someone else. OR they let the various contracted routes go (QLD/WA) to new commercial operators as future tenders come due thereby ensuring continued service to remote communities (let Rex slowly shrink).
”get some Dash 8 -300’s!!”
Good luck finding 20-50 of these in good working order. “But QF!” They’re getting rid of theirs for the same reason they wouldn’t work for a reborn Rex, spare parts are becoming incredibly difficult to source for the classic Dash 8’s.
PLUS: 50 seats requires security. The Saab does NOT. The extra $20-$50 per person WILL make a difference to demand. Then how viable are the routes?
”no government should be in business”
I tend to agree with this, however…. Particularly in QLD and WA, the government is already in business by providing a fixed contract and most of the passengers on the regulated routes. They ARE the customer. So if an equity position was taken in Rex 2.0, some consolidation and fleet renewal takes place, the CUSTOMER (government) gets a better service and a viable company they can sell at the end. Aka Air NZ…
”let them collapse, someone else will step in”
It’s taken Rex 20 years to get to the point of dominating regional services QF won’t do. Airnorth is the only regional carrier left they haven’t beaten. O’Connor, Skytrans 1.0, Macair, Brindabella, Aero Pelican, Air South, Emu Airways, just to name a few off the top of my head. Have all gone down the tube resulting in disruption for the communities they served. Someone else will step in, but we will have 5+ years of disruption to these towns that rely on Rex services. OR the government buys Rex, consolidates the important routes (Eg no other provider) and then sells it to someone else. OR they let the various contracted routes go (QLD/WA) to new commercial operators as future tenders come due thereby ensuring continued service to remote communities (let Rex slowly shrink).
Joined: Dec 2000
Posts: 1,018
Likes: 180
From: Australia
From the ABC news site
a week before Rex announced a trading halt, it issued a statement to the ASX with a new set of conditions entitling Mr Howell to 12 months' notice for his termination period.
Perhaps more importantly, the new provisions allowed that in the event there was a "significant change to his duties or responsibilities, or a change which substantially diminishes his position, the company will immediately terminate his employment and make payment in lieu of 12 months notice".
Im trying to find definitions for golden parachute and insider trading too on a seperate matter but I just cant find any good examples…
a week before Rex announced a trading halt, it issued a statement to the ASX with a new set of conditions entitling Mr Howell to 12 months' notice for his termination period.
Perhaps more importantly, the new provisions allowed that in the event there was a "significant change to his duties or responsibilities, or a change which substantially diminishes his position, the company will immediately terminate his employment and make payment in lieu of 12 months notice".
Im trying to find definitions for golden parachute and insider trading too on a seperate matter but I just cant find any good examples…
Joined: Jul 2015
Posts: 300
Likes: 93
From: Lagrangian point 2
For the record, I just tried to have the following posted as a comment on The Australian under their All options open for Rex but ALP wants say story;
REJECTED inside of a minute, something of a record I think.
REJECTED inside of a minute, something of a record I think.
Not 100% sure it will work but I think you need to remove accusations and the use of names… something like this (excuse the plagiarism);
It is probably high time for someone to focus on the management and board dysfunction at Rex that led to this corporate disaster. They came up with the highly risky idea of launching jet operations, that was then poorly planned, and executed.
Warning bells have been ringing for a year or more. Anyone who took the time to look at the details in Rex's financial reporting and do just a modicum of digging, could see a bad situation getting progressively worse.
Many of us remember that back in 2020, within just a few weeks of Virgin having entered administration, Rex management was quite happy to provide the media with it’s views on how poorly managed Virgin had been, and what a bad job administrators were doing. Any words of introspection or contrition now?
Remember the pronouncement, “There has never been a better time to launch a domestic airline.” Many of us do!
And doubtless, as Qantas plays its part in getting stranded Rex passengers to their destinations, there would be a few Qantas executives who remember Rex repeatedly and generally baselessly criticizing of Qantas; their June 2021 claim that "On face value Qantas is technically insolvent ... Its unencumbered cash is insufficient to refund the tickets that are eligible for a refund" certainly must be invoking thoughts of shoes and feet, of geese and ganders.
When are Rex management, and the rest of the Rex board, going to be held to account?