REX AIRLINES Trading Halt

[Saintly]

Here in WA, I have family in Carnarvon (CVQ/YCAR). If Rex was to stop operating then not sure which airline would take over, bearing in mind that when the E.O.I for the coastal routes (Carnarvon, Monkey Mia, Albany & Esperance) in WA went out for tender last year only one airline expressed interest......Rex.

Rex have had these routes since about June 2018.

[Saintly]

Originally Posted by Bull_Shark

From the moment the work experience kid at Rex scribbled together the master plan to shake up the domestic aviation sector here in Australia it was already being called for the bullsh!t pie in the sky fantasy it was.

Rex has totally turned its back on Regional Australia, its staff and shareholders and now while half its fleet of Saabs sit rotting in fields around Australia of course it’s not the inept and ego driven management who are to blame and as a result taxpayers will be paying for their incompetence.

People in the country have long had enough of the lack of service, cutting back of routes and increased airfares and I don’t think it would be a great loss to them if they ceased operations.

It’s a great shame that unqualified and incompetent management have driven Rex burning into the ground.

In other words, Rex should of just stayed with their Saab fleet, that was their niche - regional aviation...and it was working.

No need at all to enter the domestic market and operate with B737s. It rarely works in Australia, too much competition from QF/JQ and VA.

[The Butcher's Dog]

And my question is how will this affect the NSW and Victorian Ambulance service provision by Pelair?? There have been concern in recent times.

[Icarus2001]

No need at all to enter the domestic market and operate with B737s. It rarely works in Australia, too much competition from QF/JQ and VA

I am not a fan of the place but I will defend this decision. When Virgin went under, it was entirely possible that was the end for them. Rex saw a huge opportunity and took it. They were hoping to pull off what Virgin did when Ansett collapsed. Small operator suddenly becomes the second airline. Huge risk and looking at their lack of organisation probably they would have made a hash of it. However I think I would have taken the same risk with a caveat being that I would want a solid plan b. This is where they have not done so well.
It appears they took their eyes off the money making Saab operation.

[Gate_15L]

So.....
The business plan, of their own admission is based upon:
-A major competitor going under.
-Exploiting staff of said competitor
-The hope that fire sale lease rates of aircraft would continue.

Then a major plank of your business plan doesn't eventuate....
And you continue to double down on your business plan, taking on more leases and routes.
Then let your bread and butter operator deteriorate meanwhile splashing the cash to acquire other options.
Then you bleed $1 million a week....

Who's fault is that?

Apparently not the Board or management of said operation....​​​​​​​

[RickNRoll]

Originally Posted by SHVC

I love how it’s reported that it’s the other airlines fault for Bonza and Rex. Don’t ever blame the people running these company’s couldn’t possibly be them.

You could always pick the cheap Virgin and Qantas fares. They were the ones at the same time as the the competitions fight.

That's what happens every time. The big companies take a loss on that flight paid for by higher fares on other flights.

[Rhterrke Atnyeneteke]

Originally Posted by The Butcher's Dog

And my question is how will this affect the NSW and Victorian Ambulance service provision by Pelair?? There have been concern in recent times.

Rumour has it that they have been cap in hand to the government demanding more money to continue services, or else.

[TBM-Legend]

Originally Posted by RickNRoll

You could always pick the cheap Virgin and Qantas fares. They were the ones at the same time as the the competitions fight.

That's what happens every time. The big companies take a loss on that flight paid for by higher fares on other flights.

that’s called the free enterprise system where you companies can set their own rates. Otherwise it’s called socialism or communism where the state sets the rates.

There are rules about collusion in Australia

[KAPAC]

Ansett and TAA got trunk routes and protection but had to service loss making regional routes . Qantas making 100’s of millions profit gives government tax income that could be used to provide subsidies to remote communities ? It’s been an issue for 100 years . Many small towns have just out lived their economic usefulness and require subsidies so what’s solution to fund subsidies ?

[Mr Proach]

Reportedly in conjunction with a pending "Material announcement". Does anyone have more detailed information?

[TimmyTee]

I'm sure there would be more than a few at Virgin that would be slightly miffed if the government tipped even a dollar into saving Rex/their 737 ops

[d_concord]

Originally Posted by MickG0105

Apparently, it's not Deloitte, rather it is EY who were called in.

Thanks, Thought I read Deloitte's. Irrespective it will be interesting to see who called them in and whether there is some other play going on rather than the board saying we need to get this under control through a freah set of eyes. Can't help but feel Kim Hai may have kicked an own goal as they say.

[FruitSnack]

Australian airline Rex set to appoint EY as administrators

Georgina McKay and Angus Whitley

Bloomberg

Tue, 30 July 2024 10:26AM

Australian regional airline Rex is set to appoint Ernst & Young as administrators, according to sources.

Shares of the carrier, formally known as Regional Express Holdings, were halted from trading Monday, pending a further announcement.

EY’s appointment could be announced as soon as Wednesday, according to the people, who asked not to be named.

A spokeswoman for Rex declined to comment. A spokesman for EY didn’t immediately return a phone call or reply to text messages.

Rex shares have fallen 35 per cent this year. The carrier mostly serves regional cities, but has more recently added services between capital cities such as Sydney and Melbourne, routes which are dominated by larger rivals Qantas and Virgin Australia.

Australia has already seen one airline fold this year, after upstart carrier Bonza in April suspended operations and appointed Hall Chadwick as administrators.

Bloomberg
https://thewest.com.au/news/aviation...=the-west-news

[Ollie Onion]

Originally Posted by TimmyTee

I'm sure there would be more than a few at Virgin that would be slightly miffed if the government tipped even a dollar into saving Rex/their 737 ops

Why? Virgin only still exists due to the ability to write off substantial debts and restructure under protection of insolvency laws.

[TsPsgreen]

Looks like another Bonza happening.

[TimmyTee]

Originally Posted by Ollie Onion

Why? Virgin only still exists due to the ability to write off substantial debts and restructure under protection of insolvency laws.

"We're not in the business of owning airlines" I believe was the response to the question of a government financial bailout

Or this gem
"The government is not going to bail out [five] large foreign shareholders with deep pockets"

[Saintly]

Originally Posted by Icarus2001

I am not a fan of the place but I will defend this decision. When Virgin went under, it was entirely possible that was the end for them. Rex saw a huge opportunity and took it. They were hoping to pull off what Virgin did when Ansett collapsed. Small operator suddenly becomes the second airline. Huge risk and looking at their lack of organisation probably they would have made a hash of it. However I think I would have taken the same risk with a caveat being that I would want a solid plan b. This is where they have not done so well.
It appears they took their eyes off the money making Saab operation.

So far the decision to enter the domestic market hasn't been a good one but hindsight makes it easy to look back.

[d_concord]

Ok, I think what has happened here is that someone other than the board brought in Deloittes and it looks like the Board are circumventing that by appointing EY as administrators.(rumoured only at the moment).

Its like a game of chess at the moment

[assasin]

Originally Posted by TBM-Legend

the Saab op was not funding the jet operation, it was a $150m cash call that did that and the cookie jar is looking like a hour glass. Remember VA tried to stay alive on loans and cash injections until their hour glass ran out of sand. A number in the industry tell me they are being late paid or put on payment plans which is again lack of cash ie revenue. One day the lemon is very dry..,,

I beg to differ, while I totally understand where you are coming from with the $150mil paying for the jet lease, fuel, crew salary etc. I was referring to the infrastructure, the extra ground staff check in staff gate staff were all coming from the saab budget! As usual very creative accounting going on.

[FruitSnack]

Originally Posted by d_concord

Ok, I think what has happened here is that someone other than the board brought in Deloittes and it looks like the Board are circumventing that by appointing EY as administrators.(rumoured only at the moment).

Its like a game of chess at the moment

​​​​Kinda like how 777P brought in KordaMentha on Bonza without telling any board members in Australia.