REX AIRLINES Trading Halt

[Icarus2001]

Originally Posted by Mixie

Anyway, last comment on this particular thread and Rex will survive with government support.

As would Ansett, Compass, Ozjet, Skyairworld, Jetgo, Air Australia, Virgin and Bonza.

​​​​​​​What is your point?

[Mixie]

My point is 1 Australian aviation company can survive quite well without government support, even with sky high oil prices and the CEO of that company has made that statement number of times.

Given my research, I believe her ,but time will tell.

I look at what the aviation industry will be like in 5 years time ,but once in a lifetime events like 9-11, GFC and Covid have happened in the last 23 years.

It suits Qantas to have such a weak competitive landscape rather than being sole player in town.

Anyway, my research has been called rubbish on here ,and all good from my perspective.

As an aside, I looked at Rexs fleet and what struck me was age profile of the frames they owned.

Also their offices in Baxter Road resembled a shoebox.

That was enough for me not to invest in them.

Do not base anything I say as true-DYOR is key.

Have a great weekend fellow forum members.

[43Inches]

Originally Posted by Mixie

Car leasing and aviation leasing are completely different IMO especially when China is changing the game by flooding the market.

There's no difference in what a lease is. The difference between aviation and the car market is just the relative cost of the asset and availability. If Boeing and Airbus had opposition from China such as Comac, ACAC, AVIC and Harbin flooding the market that would just make the purchase and lease of aircraft cheaper. Car leasing companies make just as much as aircraft leasing companies, its the banking industry, they just make money off the movement of cash, not the use of the vehicle. They just balance risk vs reward and set a margin on the lease that ensures they make money even when things go wrong.

Hertz is in trouble because the usual way car rental companies work is to buy brand new and sell before the asset fully devalues and maintenance costs kick in. Which has worked fine for decades with petrol models. But what they didn't bank on is how little electric cars would be worth after the same period of use, compared to purchase price. So the write down in asset value has destroyed their balance sheets. So the issue could be if you purchase a fleet of 10 737s for instance based on 20-30 years of use and a new technology comes along rendering them completely obsolete, you are now left with an un-competitive fleet worth junk, if you leased it, you just return them. So in a lot of cases locking in a fleet for the long term via outright purchase (loans etc) is the right way to go. Where if you want flexibility then leasing might be higher cost, but give you more ways to pivot.

You can not compare Qantas to Rex or Bonza either. When QF buys a 'fleet' it's of significant size so there will be a large discount on the purchase per unit. Rex, Bonza, and all the small players will have to pay significantly more to purchase new aircraft, in the same way they have to pay more to lease them, they just don't have the negotiating power. Which comes back to what I said before that some aircraft leasing companies buy up aircraft in bulk so that they can purchase them cheaper and then offer lower lease rates comparable or better than what it would cost a small operator to purchase.

Originally Posted by Mixie

​​​​​​​Hindsight is a great thing but there was only going to be 1 outcome once they decided to compete with Qantas on high margin domestic routes.

Bonza didn't compete on the main routes and failed from lack of demand on the routes they did operate. Rex chose correctly to vie for the trunk routes, where they failed was in marketing and sales. As was pointed out many times here they had very low loads even with prices that were competitive. So they failed to attract customers, the other operators had high loads and at most times much higher fares.

[nomess]

Originally Posted by Mixie

I look at OPEC,crack spreads,2025 oil production by country,1 parameter among many in my decision to continuing holding Qantas shares.

Have you checked out the debt maturity levels later this decade?

[Mr Google Head]

Mixie there’s enough QF staff on here already hijacking non QF threads and trying to turn them into QF threads.

This also isn’t an investment forum. Maybe try one of the QF threads to get some validation on your QF shares?

[KRUSTY 34]

Originally Posted by Mr Google Head

Mixie there’s enough QF staff on here already hijacking non QF threads and trying to turn them into QF threads.

This also isn’t an investment forum. Maybe try one of the QF threads to get some validation on your QF shares?

Yup, it’s definitely doing my head in. Although some would argue that’s not too difficult. 😂

[tail wheel]

The thread title is "REX AIRLINES Trading Halt".

There are more than enough active Qantas threads without turning this thread into a pseudo Qantas thread.

[Newhairdo]

Mixie,

If you want to bang on about Qantas, their share price, their aircraft leasing/buying decisions, or Aercap and other associated drivel, please can you start your own thread. That way we can all give you a good ignoring.
This is a Rex thread. Please try to keep up.

[V1 rotated]

ASIC sues REX and four Directors

ASIC sues REX and four Directors

Early Chirstmas present from ASIC to REX

[MickG0105]

Originally Posted by V1 rotated

ASIC sues REX and four Directors

Early Chirstmas present from ASIC to REX

Sometimes the best news for the year comes late in the year. There's likely enough residual animosity between the defendants that ASIC will have a cooperating witness.

Hopefully this announcement will place some pressure on EY to reveal the selling price of Rex's 50 percent stake in NJE to LKH et al; a transaction that almost certainly benefited at least two of the directors named in the listed ASIC prosecution.

[BagoRatz]

Originally Posted by V1 rotated

ASIC sues REX and four Directors

Early Chirstmas present from ASIC to REX

The chickens are coming home to roost

[1A_Please]

The government can't afford for regional services to be cut in advance of the election. They are already on the nose in the regions so they have no choice but to continue to fund the REX regional operations.

Post election, regardless who wins, a more permanent solution will need to be found probably through subsidised routes to various other airlines such as Skippers, Link, Air North etc. In theory, QF Link could play a part but they don't have a fleet that could handle these small routes. Even their smallest Dash 8-200 is probably too big and they are in the process of being retired anyway.

[Slippery_Pete]

Do you still have to refer to someone as honourable when they’re in the middle of an investigation?

[Colonel_Klink]

From this article, it seems like ASIC is suing for issues regarding the 2023 non disclosure of a profit downgrade - not all of the other shenanigans that have been talked about in this thread!

Hopefully this is just scratching the surface and that the chickens come home to roost with this mob!

[1A_Please]

It's unlikely he would be kicked out of the country but he could definitely be banned from being a director.

[Stationair8]

FFS ASIC, would have shutdown for Christmas at least two weeks ago.

ASIC bit liking getting bitten by a Chiuhuahua!

[Icarus2001]

Any chance that LKH could face some sort of extradition to Australia

​​​​​​​ It's unlikely he would be kicked out of the country but he could definitely be banned from being a director.

Difficult to kick someone out of a country they are not presently in.

[MickG0105]

Originally Posted by Colonel_Klink

From this article, it seems like ASIC is suing for issues regarding the 2023 non disclosure of a profit downgrade - not all of the other shenanigans that have been talked about in this thread!

Hopefully this is just scratching the surface and that the chickens come home to roost with this mob!

I suspect that this is a case of low-hanging fruit, as proving the FY23 non-disclosure is pretty much a lay-down misere. Rex set themselves up for trouble when, barely a month into FY23, they started releasing bullish profit guidance. I think that most of us remember the announcements of increased and purportedly increasing profitability that were based on "unaudited management accounts".

As soon as any publicly traded business issues a positive profit guidance, they create an obligation to correct said guidance as soon as they become aware that it needs revision. After about six months of the "Rivers of Gold" announcements Rex then went silent on the topic until just 10 days before the end of the financial year, when they issued a downgrade.

The ASIC case is easy to prosecute; if Rex were able to produce positive guidance on a monthly basis, then it should have taken no more than a month to realise that that guidance needed revision.

[nomess]

Between July 2022 to February 2023, they released monthly statements to the market advising unaudited profitability numbers, positive momentum, and so on. Then silence until the final week of the FY.

FY24 is another doozy. Seems like they got too distracted in the boardroom, that someone forgot to update the market. The business essentially fell of a cliff after last Christmas. Then Virgin came knocking not long after. It was well known in internal circles that they had issues, LF had sunk into the 40s.

[RickNRoll]

For a laugh I sat in for five minutes of the "Jetcorp Scandal".

In 1992, Grimwade was charged with fraud and conspiracy for his involvement in a false prospectus issued for an entity called Jetcorp Australia Unit Trust.[1]

The trial became the longest running criminal trial in Victoria history.[2] After a first jury had sat for seven months, Grimwade's wife died and he was granted a new trial.[3] The second jury sat for over nine months, during which time the judge and some jurors were absent at various times for medical reasons.[4]

The length of the trial was exacerbated by the defence strategy of continually challenging Crown statements, with the result that the Crown was required to strictly prove each and every bit of evidence irrespective of whether it was in dispute or germane to the defence.[5]

This strategy ultimately succeeded. Grimwade was found guilty on nineteen counts of fraud and conspiracy,[6] but the verdict was overturned on appeal, the appellate judge ruling that the case had become so convoluted that it had become impossible for the jury to render a proper verdict.

How did the judge get to claim it was impossible to render a proper verdict. Not because the prosecution did anything wrong. Also, it was not impossible.

Grimwade had enough money to challenge everything and the defence was actually waffling on about the concept of justice and nothing else while I was there. Lawyers know better these days. Go for the simple, direct kill shot if possible Once it gets complex it can easily get derailed.