REX AIRLINES Trading Halt
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Joined: Dec 2001
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From: Melbourne
REX AIRLINES Trading Halt
It hasn't cratered but it does continue to decline. $0.60 was seen as a protection level but once it fell through it, the share price continued to decline and is now $0.56 meaning the share price is exactly half of what it was this time last year. It is likely it will test $0.55 in the next few days and, with no sign of any meaningful demand, it is just as likely to be approaching $0.50 by the time the annual results are released at the end of August.
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17th December 2024, 07:57
Joined: Jul 2003
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From: Somewhere
Why would a government buy it? Cause the government has an onus to provide transport & the little players would be too much of a risk.
Especially in this instance where the profits have gone private and the debts public?? It’s terrible policy and you are essentially subsidising incompetence and creating moral hazard. Sharps, Skippers et al should be lobbying Canberra and throwing mud. I would be pretty upset if I was one of those operators. You operate fiscally conservative operation your competitor takes a gamble and loses then gets a huge government bailout.
That isn’t capitalism.
Joined: Dec 2023
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From: Oz
Nev has a base salary as reported the other month of $350k. They have previously said they don’t believe in high salaries for management, however these people are likely not employable anywhere else which is why they are still there.
A early start to the holiday is only really 2 or 3 days worth of red ink for him.
A early start to the holiday is only really 2 or 3 days worth of red ink for him.
Joined: Jan 2024
Posts: 19
Likes: 26
From: Aus
Again, Rex (a few mongrels at HQ) show how obsessed they are with being dodgy and corrupt. The sooner this circus closes the better for everyone. Sure, many workers will feel the pinch but will be better for Australian aviation in the long term to see these clowns gone. Most of those saab guys are dinosaurs or green cadets.
Joined: Mar 2024
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From: Far far away
Joined: Dec 2023
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From: Oz
It’s quite frustrating to read that, again, another case of airline management down under who burn the house to the ground and wait until only smouldering pieces remain before calling in help, front line workers and families now suffer the consequences.
It didn’t need to be like this, I think this 737 operation could have worked, could have been done differently, but it’s been done the Rex way. It’s clear PAG are not offering further funding.
Rex needs to go back to being Rex. The issue is, the old Rex is also wounded with a depleted Saab fleet. Disposing of the Jets and going back to ‘what once was’, isn’t that easy either.
It didn’t need to be like this, I think this 737 operation could have worked, could have been done differently, but it’s been done the Rex way. It’s clear PAG are not offering further funding.
Rex needs to go back to being Rex. The issue is, the old Rex is also wounded with a depleted Saab fleet. Disposing of the Jets and going back to ‘what once was’, isn’t that easy either.
Joined: Aug 2007
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From: sydney
Not good for anyone if they go under.
REX CALLS IN TURNAROUND SPECIALISTSStories abound of instability in the nation’s aviation sector. Budget airline Bonza fell into administration in April. The mooted listing of Virgin Australia keeps faltering, and now Qatar Airways wants to gobble up a strategically important part of it.
And what of Regional Express? Its executive chairman, Lim Kim Hai, was hot-swapped in June for deputy chair John Sharp, a former transport minister in the Howard government. Lim had served as executive chairman for 21 years, and aside from brief remarks issued by the company acknowledging his “extraordinary service”, no further reason was provided for this sudden and startling tweak to the board.
Seething, as you would expect, Lim went on to requisition a shareholders meeting to remove Sharp and three other directors from the board: Lee Thian Soo, Ronald Bartsch and Jim Davis. No reasons were provided for that development either.
This upheaval is taking place just as Rex finds itself in a spot of serious financial bother, so serious, it seems, that Margin Call hears that the airline has invited a turnaround team from Deloitte to rifle through its books and try to stop the proverbial plane from crashing into the mountain.
Leading that team are Sal Algeri and Richard Hughes, memorable for their role in the recovery of Virgin Australia after that airline slid into voluntary administration in 2020. Deloitte didn’t respond to questions about Rex and Rex itself declined to comment. “Given Rex is a public company, we do not respond to press or market *rumours or speculation,” a spokesman said.
Rex’s troubles are not necessarily with its regional routes, which are said to be profitable, but with its expansion into the prized city destinations of Sydney, Melbourne and Brisbane, known in the industry as the Golden Triangle (a misnomer, by the way, the route connecting them forms no obvious triangle).
An expansion into those capital city markets began in 2020, its market share remains in the single digits, and the whole jolly has cost the business dearly. Deloitte’s partners are in a fever attempting a restructure solution as a rescue package. That too, we hear, is teetering towards failure.
Where to from here? Rex’s Golden Triangle dilemma could become intractable enough to push the airline into administration. Whether or not that occurs, the appearance of Deloitte’s clean-up team at least provides a plausible explanation for the airing of linen about to start in the boardroom.
After all, it was Sharp who said last year that profitability mattered more than market share, a remark made only after Rex posted a loss of $16.5m for the half to December 2022. Its latest results weren’t quite as fugly – a $3.2m loss for the half to December 2023
REX CALLS IN TURNAROUND SPECIALISTSStories abound of instability in the nation’s aviation sector. Budget airline Bonza fell into administration in April. The mooted listing of Virgin Australia keeps faltering, and now Qatar Airways wants to gobble up a strategically important part of it.
And what of Regional Express? Its executive chairman, Lim Kim Hai, was hot-swapped in June for deputy chair John Sharp, a former transport minister in the Howard government. Lim had served as executive chairman for 21 years, and aside from brief remarks issued by the company acknowledging his “extraordinary service”, no further reason was provided for this sudden and startling tweak to the board.
Seething, as you would expect, Lim went on to requisition a shareholders meeting to remove Sharp and three other directors from the board: Lee Thian Soo, Ronald Bartsch and Jim Davis. No reasons were provided for that development either.
This upheaval is taking place just as Rex finds itself in a spot of serious financial bother, so serious, it seems, that Margin Call hears that the airline has invited a turnaround team from Deloitte to rifle through its books and try to stop the proverbial plane from crashing into the mountain.
Leading that team are Sal Algeri and Richard Hughes, memorable for their role in the recovery of Virgin Australia after that airline slid into voluntary administration in 2020. Deloitte didn’t respond to questions about Rex and Rex itself declined to comment. “Given Rex is a public company, we do not respond to press or market *rumours or speculation,” a spokesman said.
Rex’s troubles are not necessarily with its regional routes, which are said to be profitable, but with its expansion into the prized city destinations of Sydney, Melbourne and Brisbane, known in the industry as the Golden Triangle (a misnomer, by the way, the route connecting them forms no obvious triangle).
An expansion into those capital city markets began in 2020, its market share remains in the single digits, and the whole jolly has cost the business dearly. Deloitte’s partners are in a fever attempting a restructure solution as a rescue package. That too, we hear, is teetering towards failure.
Where to from here? Rex’s Golden Triangle dilemma could become intractable enough to push the airline into administration. Whether or not that occurs, the appearance of Deloitte’s clean-up team at least provides a plausible explanation for the airing of linen about to start in the boardroom.
After all, it was Sharp who said last year that profitability mattered more than market share, a remark made only after Rex posted a loss of $16.5m for the half to December 2022. Its latest results weren’t quite as fugly – a $3.2m loss for the half to December 2023
Joined: May 2016
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From: Sunshine Coast
... and Rex itself declined to comment. “Given Rex is a public company, we do not respond to press or market *rumours or speculation,” a spokesman said.
... Rex posted a loss of $16.5m for the half to December 2022. Its latest results weren’t quite as fugly – a $3.2m loss for the half to December 2023
Last edited by MickG0105; 26th July 2024 at 22:33. Reason: Added point to save another post
Joined: Dec 2001
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From: Brisvegas
This sounds like the Bonza playbook. Nothing to see here, everything going well, plenty of cash for the next two years. Then call for financial advice to dig themselves out of a hole. Leading to bingo, doors are closed, see you later. The tax payer picks up the allowances and the needle returns to the start…
Joined: Oct 2007
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From: Aus
Events back in 2007 have led Rex to where they are now. That's when they decided they owned staff and didn't have to work with their employees to achieve a better workplace. Since then instead of real expansion the airline has generated profits from cost cutting and cherry picking subsidies, none of which are solid long term business plans for a company which main focus should have been its traditional regional customers. Instead their heart in the country is now being picked apart by QLink adding to their major competitors profit and expansion/upgrades. I could probably point directly at 3 or 4 major years in history where regional patronage was booming only to be stymied by a lack of staff, mainly pilots, leading to a loss of reliability and passengers jumping ship or driving. So even thugh Rex has been profitable in the past they could have been exponentialy more successful had they not hit these management induced speed humps.
Joined: Jan 2019
Posts: 337
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From: Australia
Another heapin' helpin' of that good old Rex arrogance! Given Rex is a public company, they have an obligation under S.674 of the Corporations Act 2001 to disclose to the market any information that would reasonably be expected to have a material effect on the price or value of the company.
It would be great if reporters commenting on financial matters could properly interpret financial reports. Rex's H1FY24 operating results were manifestly worse than H1FY24.
It would be great if reporters commenting on financial matters could properly interpret financial reports. Rex's H1FY24 operating results were manifestly worse than H1FY24.
You’d think if you’re are calling in Deloitte to look at restructuring the business - then the ASX probably should have been told!
And it constantly surprises how little digging business journalists from the Australian or AFR do into Rex.
Thread Starter
Joined: Dec 2001
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From: Melbourne
Safe to say, it is likely that REX will be suspended from quotation on Monday and when/if is appears back available for trade the actual price could be somewhere between $0.05 and $0.20.
Joined: Jan 2006
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From: Sydney Australia
Do you hear that? Chickens coming home to roost.
Joined: May 2016
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From: Sunshine Coast
My view - and it's just an opinion - is that they are probably worth a bit more than that, given the variety of potential revenue streams that they have. I'm also a view that, while they have basically just sleepwalked their way into this predicament, they've at least called in administrators before they have completely exhausted all their cash. Things MIGHT be salvageable (emphasis on MIGHT).
Joined: Aug 2007
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From: sydney
What will Deloittes tell them ? You are losing money on 737 routes so stop flying those. You don’t have enough and can’t keep pilots and engineers so you need to pay them more and put up ticket prices to cover that. Trouble is then you have less paying customers and probably the pilots at least will still leave. I hope like hell they survive but am not confident.
Joined: May 2016
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From: Sunshine Coast
What will Deloittes tell them ? You are losing money on 737 routes so stop flying those. You don’t have enough and can’t keep pilots and engineers so you need to pay them more and put up ticket prices to cover that. Trouble is then you have less paying customers and probably the pilots at least will still leave. I hope like hell they survive but am not confident.
PelAir is almost certainly profitable so there's a starting point.
There is almost certainly a kernel of profitable routes for the B737s, just as there are routes that have just been cash incinerators. There may be a play by exiting some routes and increasing frequency on others.
You'd have a good look at what's going on with the Academy. You'd also have a look at NJE - it looked like it was on the cusp of profitability at the end of last year.
There may be a path out of it, there may not - as the Zen Master was fond of saying, "We'll see."
Joined: Dec 2023
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From: Oz
There is almost certainly a kernel of profitable routes for the B737s, just as there are routes that have just been cash incinerators. There may be a play by exiting some routes and increasing frequency on others.
Watch ancillary revenues start to appear. Basic Economy would be a start, bring the price down, watch the loads jump very quick.
Probably best to get Deloitte in while LKH is not holding the power. Not someone I can imagine working with such people. Just imagine lol.
Last edited by nomess; 27th July 2024 at 07:50.
Joined: Jan 2019
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From: Australia
And would exiting some routes and increasing frequency on others be enough to turn that around? It seems like a big ask….
Joined: May 2016
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From: Sunshine Coast
There are a couple of routes that seem to see not unreasonable pax numbers; MEL-OOL springs to mind. There are many routes where they are just torching cash; SYD-MEL leaps off the page when you look at this month's numbers.
Could you construct a route structure/flight schedule/pricing strategy that is better commercially than the current offering? Undoubtedly! Could it sustainably make money for them? Your guess is as good as mine.
One thing for sure and certain is that if they have engaged Deloitte, they will be able to cut through bullsh!t and determine if there's a pathway out.
Last edited by MickG0105; 27th July 2024 at 11:33. Reason: Typo
Joined: Mar 2003
Posts: 55
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From: uk
I don't think LKH will take an ounce of notice of Delloites if he wins the boardroom battle, and he will shut the investigation down. Let's hope the current board have got the kahunas to take him on all the way and prevent this from happening. Seems like Nifty is gearing up to be a casualty of the purge.