Which one is leaving ? RQG or RQC ? Both still look to be operating for at least the next month ?

RQG… Feb 24’ freighter conversion in China, then off to a new home.

This appears to be the draw down of a further $25 million from the PAGgybank yesterday. That is Rex's single largest draw down since they took the initial $50 million to kick proceedings off back in March 2021.

Rex Domestic had easily their best month of the financial year in November, carrying just shy of 180,000 pax on some 1,280 flights. Meanwhile their share price is now testing 75 cents (half of the conversion price of the PAG convertible notes).

Things appear to be somewhat off here.

What's the story with the new jet, -8ZL? It seems to have an odd "non-standard" seating configuration.

Probably just a lack of care for consistency and refurbishments in their fleets

Out of interest Mick, what did you mean that things were somewhat off here?

Am I correct in saying that the convertible notes can only be used for the 737 operation?

Australian Executive Traveller had this to say on Rex’s ‘Euro Business’

https://www.executivetraveller.com/news/rex-737-economy

It's ex GOL, while most of the others are in Virgin or SilkAir layouts. I doubt that they will be able to get any job-lot deals on 737NGs in the near term, so it seems they are going to have to get used to these non-standard layouts.

G'day Colonel, it just struck me as somewhat odd that hot on the heels of Rex having easily their best month of both the current financial, and calendar year in November, that:

a. their share price remained stubbornly in the dunny (sitting barely above 50 percent of $1.50 conversion price for the convertible notes), and

b. they needed to draw down a further $25 million, easily their single largest draw down of cash since the initial $50 million to get things rolling back in March 2021.

If they didn't make money on the November numbers, they are likely in a spot of Barney Rubble.

And yes, the PAGgybank is meant to be "used to establish, launch, operate and expand Rex's Australian domestic Regular Pubic Transport jet operation ... using leased Boeing 737-800NG jets".

Euro Business, you say? So like ordinary business but with slicker suits.

REX says that the Euro Business seats will be replaced in early 2024, what would you have them do? Just sit the new bird on the ground till then ?

Thanks for the reply Mick.

I, as I am sure many others here, appreciate your insights when it comes to deciphering some of this finance stuff.

Mick it is like the old retail joke, "we are losing money on every flight but we will make it up on volume".

​​​​​​​I predict a buyout or other massive changes at Rex. Pretty obvious they cannot continue this way.

Treading water methinks with regional ops soon to be binned, no capital for new aircraft, asx delisting etc etc

Yes, the old 'Never Mind the Quality, Feel the Width'.

February-March next year will be, if not crunch time, certainly an inflection point - half-year results will be out (and Rex will be out of tricks to prop up their numbers), we'll have an insight into how NJE is performing, the market should have a feel for domestic's performance in January/February, and the Initial Term for the PAG deal will be up.

It will be very interesting to see whether they have been able to salvage anything from regional, or whether we'll get a repeat of the February 2023, "Regional operations have been a drag on the Group's performance." announcement.

Probably worth noting that Rex with no Regional is just Ex.

Thank you, Colonel. It's not as though there's not a good deal of reciprocity in terms of others providing some very good insights into the operational side of things.

That is gold Mick………………

Sometimes they really do just fall into your lap.

Actually, regarding the name REX
Here is my prediction for 2024 and beyond
REX will continue adding 737s 3-5 per year
Bolstering the triangle and adding Perth, Cairns, Sunny Coast and Launceston
E190s will enter the fleet with support from NJE to support their 737s
In time REX will run under 3 names
Their mainline will run under National Jet Express (a much better fit)
Regional Express for their country work
A separate name then will be introduced for their charter work

As their fleet of SAABs begin to retire, they will be replaced with Q400s
At this point a few things will factor in
A growing number of 2nd hand 737s, Q400s and E190s will hit the market as the post Covid boom abates
A surplus of crew will become available see above
REX will become profitable and be in a position to re enter some abandoned regional markets and grow some existing ones
REX will improve their FFPs offering
REX will become more competitive and grow their regional on the back of mainline

Regarding their profitability, given their loads and better pricing with their jets, I believe they are doing better than they are letting on at the moment
The $25m drawdown won't be for the past, I believe it is for further growth
MEL-SYD 7 daily needs to go to at least 12 daily
MEL-BNE 3 daily needs to go to at least 5 daily
MEL-ADL 2 daily needs to go to at least 3 daily
SYD-BNE 5 daily needs to go to at least 10 daily
OOL-SYD-MEL could easily go 3 daily each
So need a few more birds to get to these levels so there's where the $25mil is heading....

What year for the 787/777s and Qatar Merger?

[/quote]
Regarding their profitability, given their loads and better pricing with their jets, I believe they are doing better than they are letting on at the moment
The $25m drawdown won't be for the past, I believe it is for further growth
..[/QUOTE]

Convertible notes are for opex not capex, the rest of the predictions are not worth responding to given their based on world most of us are not living in!

​​​​​​​That does not seem to be indicated by current trends.

The post Covid boom has yet to abate....
​​​​​​​

Regarding their profitability, given their loads and better pricing with their jets, I believe they are doing better than they are letting on at the moment
The $25m drawdown won't be for the past, I believe it is for further growth
..[/QUOTE]

Convertible notes are for opex not capex, the rest of the predictions are not worth responding to given their based on world most of us are not living in![/QUOTE]
$25mil won't even get 1 737 so duh...
Operating expenses is a fairly large bucket that can be distributed to many and various departments

So what in particular are you in disagreement with?
More 737s, this is beyond doubt
More triangle flights, they are continually adding more flights
Expansion to more cities, they have stated this from the beginning
More Q400s, NJE are looking as we type
NJE to REX routes, see BNE-CNS
REX mainline to become NJE, sure speculation, but makes a lot sense
E190s to bolster mainline, rumour but this would also make sense on thinner routes
Q400 replacing SAABs, they will need replacing at some point and without a 30-36 seated being manufactured, there would seem to be no other option, especially with NJE already having a fleet

Here's one out of left field
Could the $25mil be used in part to buy out the remaining 50% of NJE along with a share swap, thus hitting the fast forward of many of the above points?

Capacity is at 90% pre Covid levels and likely to stay that way for some time owing to pilot shortages, P&W GTF issues and the demand for PCF stock (which is waning).
Meanwhile lease rates for the 737 are climbing with a 18 year old 737-800 going from a low of Q4 2021 of USD80k per month to USD150k per month currently, which coincidently is less than a Dash 8 Q400, your solution to the SF340s!
Rex has been profitable in the past with low cost ops using owned aircraft, now those owned aircraft are redundant and they are faced with massive increasing costs just to maintain their network, let alone grow it.

LOL, Rex booked a 45M increase in value as their share from the JV in the last results, if 25M allowed them to buy the remaining 50% questions would be asked. Given the PAG funding is exclusively for the domestic jet operation it’s a moot point, won’t happen.

I've seen financing news quoting $US200-280,000 (AUD 294-412,000) a month range for -800 lease rates depending on the age. I'd be surprised if Rex got any of the last three relatively low-time jets for under $US240,000 a month, and likely much higher than that. Suffice to say that the notion that a very small operator, with a flaky P&L, paying in Pacific Pesos would be getting preferential rates is a fantasy.

We'll get a bit of a line of sight on the numbers when the half-year results get posted in a couple of months, so stand by to standby.

A huge sample of one I know, but yesterday I took my first flight on Rex (MEL - BNE) as there were no seats for staff on Qantas and Virgin wanted $889 vs Rex's $329; and that was booking at 90 mins before ETD. We departed a bit over an hour late, but then everyone was to Brisbane.

The flight was about 2/3 full in economy (including 5 Qantas staff) but full in Business. I was surprised it wasn't chocker down the back given the fare differential.

The service onboard was as good as contemporary domestic economy ever is on any airline and we were thankful for the move from row 14 to the an exit row.:ok:

Rex quietly announced tonight that regional temporary cancellations announced in September last year will no longer cease in March, now running through to October due to Covid!

https://www.rex.com.au/MediaAndPress...st.aspx?y=2024

They also seem to be taking the wire brush to their domestic schedule. Today they only operated 38 flights, 8 fewer than last Friday; only 6 SYD-MEL return, no MEL-OOL service, pax numbers were woeful. I suspect that they might be in a spot of Barney Rubble.

Quite apart from your pathetic attempts to **** stir you do realize that traditionally we are now in probably one of the quieter times of the year following the return of school etc etc……

Last week was still inside the holiday period and obviously would be busier.

The sky isn’t falling in just yet mate but keep wishing for Rex to fail.

Now back to QF or VA for you. You most certainly have your own set of issues to deal with.

Yea, so that theory did not pan out as RQG is back doing work

Dont be ridiculous ACMS, Mick is waay too busy to look at seasonal variations. He reads ASX announcements and financial reports don't you know and gifts his wealth of knowledge to us plebs.


QUOTE=ACMS;11589182]Quite apart from your pathetic attempts to **** stir you do realize that traditionally we are now in probably one of the quieter times of the year following the return of school etc etc……

Last week was still inside the holiday period and obviously would be busier.

The sky isn’t falling in just yet mate but keep wishing for Rex to fail.

Now back to QF or VA for you. You most certainly have your own set of issues to deal with.[/QUOTE]

Oh, I've also been known to peruse the BITRE pax traffic statistics too, certainly enough to know that while the average change in domestic pax carried daily between January and February is around -3.3 percent, that trend is not seen on the SYD-MEL-BNE triangle.

To the surprise of no one who understands the corporate/leisure split on the triangle, daily pax carried actually lifts on those sectors by around 8-9 percent between January and February.

And that, of course, makes Rex's decision to prune flights off the triangle a little more curious.

As always, it might just be a passing thing. Just as the somewhat drastic decline in Rex's domestic pax numbers over the past couple of weeks may just be a passing thing also.

And, for the avoidance of any and all doubt, I do not and have not worked for either QF or VA, but thanks for thinking of me.

It’s lease hasn’t ended yet given she spent some time at Wagga waiting on engines at the start and entered service March 31 2021 ;)

So they can take 737s at Wagga now, thought they knocked back Bonza at Wagga

No one wants to fly for a toxic/bad conditions company (Rex) and here are the results. Supply shortages are pilots leaving a sinking ship..

Been able to take 737s since 1992 when the government gave the council money for the runway. There’s even a picture of one on the airports wiki page, and tiger visited on a few occasions in years gone by, infrastructure to handle RPT flights, different story.

Delayed but still happening- but 2 more ex-Singair frames coming.

Well something is up, everytime I walk in now Rex has canceled more than normal average 73 flights whilst where I’m at carrying 170+ everywhere so can’t really blame school going back.

Saying that, VA seem to be canning a lot also.

The ship is only sinking because of a lack of staff, mainly Pilots and Engineers. All the result of poor management choices. I've heard there is still no engagement with pilots to try to stem the loss of crew, just work whats left harder so they leave faster. I was told several country based pilots quit and took up jobs outside of flying because of the workload and time away, and others have taken or are taking early retirement. So it's not just pilots leaving for 'jet jobs'.

The ship is very seaworthy, management have pulled the bungs out and are doing nothing to fix it. From what I hear is being rostered for pilots regularly they are actively bucketing water into the ship as well as setting fire to it. The shareholders should be asking hard questions of the management team as to what they plan to do, as 'let it happen', or even 'make it worse' is the present mode of operating.

Pretty sure Rex paints them at Wagga, they would be ferried in and out though at low weight.

I reckon, as I stated earlier, that they are transitioning their fleet from SAABs to Q400s under NJE, they just doubled their BNE-CNS frequency :rolleyes: and aren't they using some NJE metal in WA
As I also stated earlier, mid to long term, staff and new jets won't be as much of an issue because, I believe, the post Covid ramp up world wide is overly ambitious

Airlines and annalists likely have not taken into account what was always going to happen after Covid
Countries collectively injecting multiple trillions into economies during Covid was always going to be inflationary in the recovery stage
Governments were always going to have to recoup the stimulus resulting in higher taxes
The aging population problem was certainly not helped by Covid with millions of people world wide taking early retirement creating the current labour shortage driving up wages for the rest and further adding to inflation
All resulting in a cost of living problem and much higher interest rates and rents taking disposable income levels to new lows
This is all having impacts on commercial aviation as you can see with falling load factors with the likes of REX and more cancelations with QF/JQ and VA
Airlines have over ordered new frames and they will be offloading older frames earlier, to REX's benefit