REX AIRLINES Trading Halt
Joined: Jan 2006
Posts: 2,535
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From: Sydney Australia
Whatever REX air route you are thinking of may not be a subsidised route, but REX operates subsidised routes (for example in Western Queensland) and a number of unsubsidised regional and rural routes which are effectively sole carrier, essential air services to rural and remote destinations. There is obviously a minimum fleet utilisation to remain above break even (the Receivers are personally liable for any losses they generate) and the grant they have received meets that requirement.
Since I entered the Australian aviation industry over 50 years ago, Australia has lost air services to around 100 rural and remote destinations which were funded by RASS (Rural Air Services Scheme), Australia Post and State subsidised routes. I've lived in the bush, life can be tough without a scheduled air service. I do not want to see more rural air services lost.
The former I wholheartedly support. The latter may not be the case - Receivers (who are personally liable for the conduct of the business) don't remunerate ex Directors and seldom retain and remunerate executives who created the financial catastrophy.
Since I entered the Australian aviation industry over 50 years ago, Australia has lost air services to around 100 rural and remote destinations which were funded by RASS (Rural Air Services Scheme), Australia Post and State subsidised routes. I've lived in the bush, life can be tough without a scheduled air service. I do not want to see more rural air services lost.
The former I wholheartedly support. The latter may not be the case - Receivers (who are personally liable for the conduct of the business) don't remunerate ex Directors and seldom retain and remunerate executives who created the financial catastrophy.
Joined: Jun 2005
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From: AWOL from YWOL
Joined: Jan 2024
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From: Aus
https://www.afr.com/companies/transp...0241112-p5kpu3
Seemingly EY (Sam Freeman) isn't calling the shots there and is just a front man for the phony (soon to be a year long) administration process, or perhaps EY are as slimy and as dodgy as Rex...either way the whole thing stinks of something a lot more sinister according to the article.
Seemingly EY (Sam Freeman) isn't calling the shots there and is just a front man for the phony (soon to be a year long) administration process, or perhaps EY are as slimy and as dodgy as Rex...either way the whole thing stinks of something a lot more sinister according to the article.
Joined: Jul 2006
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From: Sydney
The other things with genuine support is that it mustn't excessively interfere with free market competition - when other regional airlines are on record willing to fill the void how can an 80M donation to EY/ REX be seen as support for regional airline services?
IMO genuine support would be industry wide (regional only) rebates on Airservices charges and Regional Airport fees.
Joined: Nov 2001
Posts: 6,146
Likes: 1,262
From: Australia/India
Two words: Upcoming election. Do 'whatever it takes' to keep 'the bush' as happy (as least unhappy) as practicable until the election.
Don't expect too many objectively rational spending decisions by government until after the election.
Don't expect too many objectively rational spending decisions by government until after the election.
Joined: Nov 2019
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From: Sydney
I’m not sure the $80m makes the company easier to purchase either, it’s another debt on the balance sheet.
Joined: Jan 2006
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From: Sydney Australia
Given that this $80m credit from the government is secured, if that’s used to pay entitlements for redundant the old Jet crew, doesn’t that mean that the current staff would be less likely to have their entitlements paid out if liquidation happens next year? The government will get their money back first before any future redundancies.
I’m not sure the $80m makes the company easier to purchase either, it’s another debt on the balance sheet.
I’m not sure the $80m makes the company easier to purchase either, it’s another debt on the balance sheet.
Last edited by KRUSTY 34; 13th November 2024 at 05:56.
Joined: Oct 2024
Posts: 10
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From: Sydney
Its a bailout and albeit small but it was always coming. It does come with detail such as it cant be used to pay down debt except in the case of worker entitlements & they must make Rex sustainable. I believe there will be a further bailout by the government but that are using this to if Rex plays ball so to speak. Yes they are plenty of smaller players that have put there hand up but all us are old enough to have seen people in jobs to anything to get higher on the ladder & then fail cause they couldnt fulfill what was said. This would leave any government in perilous position. Sometimes it better to deal with devil you know than one you don't so much.
As for EY, i hope it shows EY are useless at Insolvency. Now they want the new owner to buy a brand new fleet. It really cant be that hard. Fix the planes that are grounded & flying again and sell it on. They may get 5-10 years out of them. No one is going to pay 300M for rex.
As for debts, they should be around 250M now with the sale of the Sim Centre, the houses Rex owned in Victoria & New South Wales & when AAPA & Mascot HQ Sell should put them closer to 200M & no more PAG.
A lot of the board members & senior management should fall on their sword never to manage a board again.
As for EY, i hope it shows EY are useless at Insolvency. Now they want the new owner to buy a brand new fleet. It really cant be that hard. Fix the planes that are grounded & flying again and sell it on. They may get 5-10 years out of them. No one is going to pay 300M for rex.
As for debts, they should be around 250M now with the sale of the Sim Centre, the houses Rex owned in Victoria & New South Wales & when AAPA & Mascot HQ Sell should put them closer to 200M & no more PAG.
A lot of the board members & senior management should fall on their sword never to manage a board again.
Joined: Nov 2001
Posts: 6,146
Likes: 1,262
From: Australia/India
If EY are making a profit out of it, EY are good at Insolvency.
If that happens, it will show that EY are excellent at Insolvency.
It's more like a gumming of the ankles by a puppy (ASIC) than a fatal penetration by a sword.
If that happens, it will show that EY are excellent at Insolvency.
Joined: Feb 2006
Posts: 296
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From: Perth
Still doesn't mean that you'll get someone buying it though. But the AFR reports that one bidder was keen and shown the door, so that's interesting.
Joined: May 2010
Posts: 446
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From: australia
They never said they were buying a new fleet - the money will help get the existing grounded aircraft back up in the air. EY have probably found that if there is any chance of getting some cash flow, they need to get those aircraft back up and running to have a viable network.
Still doesn't mean that you'll get someone buying it though. But the AFR reports that one bidder was keen and shown the door, so that's interesting.
Still doesn't mean that you'll get someone buying it though. But the AFR reports that one bidder was keen and shown the door, so that's interesting.
The SAABs are old but if looked after they can still last another 10 years. That is more than enough time to start looking at fleet replacement.
What makes them such a poor buyers prospect now that wasn't the case 10 years ago?
Last edited by mikewil; 13th November 2024 at 11:13. Reason: grammar
Joined: May 2016
Aviation Qualifications: PPL
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From: Sunshine Coast
Joined: Jan 2006
Posts: 2,535
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From: Sydney Australia
100% correct Mick.
Remember everybody, REX were in active discussions with ATR nearly a decade ago, but apparently came to believe the company's future did not lie in Turbo Prop Regional operations. Now that's all what's left.
Remember everybody, REX were in active discussions with ATR nearly a decade ago, but apparently came to believe the company's future did not lie in Turbo Prop Regional operations. Now that's all what's left.
Joined: Jul 2009
Posts: 569
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From: Australia
Sounds like the fuel excise reduction. Set the expiry date after the 2022 election so they could beat the new government over the head with it if they lose office.
Last edited by AerialPerspective; 14th November 2024 at 15:33.
Joined: May 2016
Aviation Qualifications: PPL
Posts: 1,537
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From: Sunshine Coast
A lot of regional air routes are already subsidised, and go more toward a government funded transport link vs a free market competition, although Rex does operate in competition on some routes.
My thought is with the general lack of spare aircraft and pilots in regional airlines at alternate providers could not begin operating the entirety of Rex’s network to the regions immediately without mass service disruptions. So keeping the current Rex Saabs going for another 8 months is the least worst option, a poorly performing airline is better than none. Maybe by mid next year a lot of alternative operators will be a in a better position to take over Rex’s subsidised routes.
The greater problem will be current Rex crew seeing the writing on the wall and abandoning ship before mid next year. They may not even make it to June.
My thought is with the general lack of spare aircraft and pilots in regional airlines at alternate providers could not begin operating the entirety of Rex’s network to the regions immediately without mass service disruptions. So keeping the current Rex Saabs going for another 8 months is the least worst option, a poorly performing airline is better than none. Maybe by mid next year a lot of alternative operators will be a in a better position to take over Rex’s subsidised routes.
The greater problem will be current Rex crew seeing the writing on the wall and abandoning ship before mid next year. They may not even make it to June.
Joined: May 2010
Posts: 446
Likes: 78
From: australia
Anyone hazard a guess as to how Rex are managing to sustain sufficient pilot numbers given they have not actually been recruiting since they went into administration?
They were already haemorrhaging crew when they were still operating normally and I can't imagine it would be any better under the circumstances and yet the regional operation is somehow managing to keep flying...
What am I missing?
They were already haemorrhaging crew when they were still operating normally and I can't imagine it would be any better under the circumstances and yet the regional operation is somehow managing to keep flying...
What am I missing?