How far does $150m take 6 jets? Surely longer than 6 months?
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During the interview for a position mention was made that they (being the beancounters/upper management I assume) had done their homework and expected substantial oncarriage from their regional routes, sounded a bit iffy at the time purely based on volume of travellers.
Clearly the incumbents offer enough so that REX have not established a presence ML-SY-ML and probably won't....for now. Only hope would appear to swing into the Tiger leisure market, maybe try and develop new/under served routes and then maybe....maybe have another go at the golden triangle later with better brand recognition. Unless there's a desire or need to lose XXXX amount of $$ you can't sustain the unsustainable. |
It will last a while but directors have a responsibility to protect their shareholders' and creditors' money. If directors are found to have acted recklessly, they do make themselves personally liable. If they are hopelessly losing money, they have to take action before the end.
VA directors did the responsible thing last year and called in administrators rather than waiting until receivers were brought in which probably ended up with a much poorer outcome for employees and creditors including Velocity members. |
Interview with John Sharp on the today show this morning. Claiming Qantas has been capacity dumping, says QF flights are up 80% since rex started ML to SYD (somehow doesn't make the link between borders opening and flights increasing). You'll need a 9 account but worth a watch.
https://www.9now.com.au/today/2021/c...0s0ip1n9sb2vnb |
JS just on 3AW and told some classic porkies.
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Originally Posted by 1A_Please
(Post 11037679)
JS just on 3AW and told some classic porkies.
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Originally Posted by blubak
(Post 11037687)
Heard some of the same interview,didnt seem worried or concerned but good spin doctors are gifted in that area.
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Does JS really think about what he says. QF and VA are only putting back capacity that they removed due to Covid-19 and they are still not back where they were pre the pandemic.
They have a responsibility to compete and protect their market share particularly when you have someone like Rex that are using the fact they they received a very big payment from JS's mates in the Coalition that wasn't provided like for like to both VA and QF. This is going to end in tears and is another example why governments should not try and pick winners. I wonder how JS performs with the other aviation companies he is involved in. They are certainly not parading him around! |
Jet* and VA have both dropped MEL/SYD fares to $39 after JS baited them...
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Originally Posted by Agent_86
(Post 11037747)
Jet* and VA have both dropped MEL/SYD fares to $39 after JS baited them...
As Green.Dot noted at #997 Virgin had released $39 MEL-SYD fares yesterday, well before Sharp's media run this morning. And spare a thought for the financial mechanics of what's going on here. There is a marked difference financially between an airline with 80-odd percent load factors offering $39 fares and an airline with sub-30 percent load factors offering them. |
Originally Posted by MickG0105
(Post 11037749)
Baited?!
As Green.Dot noted at #997 Virgin had released $39 MEL-SYD fares yesterday, well before Sharp's media run this morning. And spare a thought for the financial mechanics of what's going on here. There is a marked difference financially between an airline with 80-odd percent load factors offering $39 fares and an airline with sub-30 percent load factors offering them. |
At this point it's simply a war of attrition. Surely JS can see that he will be the weakest player here?
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Originally Posted by Agent_86
(Post 11037747)
Jet* and VA have both dropped MEL/SYD fares to $39 after JS baited them...
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Originally Posted by pinkpanther1
(Post 11037760)
At this point it's simply a war of attrition. Surely JS can see that he will be the weakest player here?
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Originally Posted by 1A_Please
(Post 11037757)
The mechanics are very different as you point out. VA can sell 10 $39 seats that they would have previously sold as Velocity reward seats and actually be better off financially and still have an average seat price across the plane of, say, $175 and have successfully diverted 10 pax away from REX. REX are unable to sell 20 seats on a flight when they are only charging $69. Even if they double their seats sold to 40 @ $39, they are only clearing $9 per pax once airport and gov't charges are included so that is a whole $360 for themselves for the whole flight....hardly a recipe for success.
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So at around 5 SYD-MEL daily, 7 days a week that's just over $1mil lost a week on that route alone...
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Originally Posted by Australopithecus
(Post 11037818)
They aren’t clearing $9/pax because there’s still the other $10,000/hr expenses to cover. So a Mel-Syd has something like a $14,640 loss. So they are probably planning to lose a tonne of money on every flight and make it up with frequency. Oh wait...
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The Australian
Regional Express Airlines will pay as little as $60,000 a month per aircraft to lease six former Virgin Australia Boeing 737s, which will be used on the lucrative Melbourne-Sydney route. Although deputy chairman John Sharp would not discuss the leasing arrangements, it is understood the $60,000 a month cost will rise to $100,000 a month after the first 12 months. |
....plus reserves, plus insurance, plus enroute and landing and terminal fees plus plus plus....
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Judging by lead-in fares for the next couple of days it appears that VA have mostly sold their $39 fares whereas Rex’s cheapies are still for sale. Make of that what you will.
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