Pelican is pulling out of Mudgee very soon despite the region being a relatively prosperous area.

Flinders island was a thriving economy until the government subsidies stopped and they had to make it on their own . The federal government decided there was not enough return on investment and not enough votes to continue propping up lifestyle choices of locals . Went from being serviced by modern airliners to herons and Navajos . Population fell and now it’s settled into a few big farms , high value fishing exports and tourism .

Interesting comment from post #1018 regarding the industry and SAAB. Some years ago, I was chatting to a current REX board member about the future of the SAAB 340 in REX service. He assured me that it was SAAB that would not come to the party to open up the line and provide replacements for the 340B with a mix of 340C's and 2000's. This was despite REX being the largest operator of the type in the world, then and now.

Mind you my opinion of this individual has changed so much that I would now be skeptical of anything he says or would have said.

I can't speak for what interaction Rex management had with SAAB directly, although I always thought there was fairly strong dialogue between them on an ongoing basis. SAAB had offered an AEW and MSA conversion of the SAAB 340, which involved 'zero' timing old airframes and refitting them with military equipment. From that I'd gather that it would not be difficult for an operator of a large fleet to approach SAAB and negotiate something similar with regard to an airliner. That is send old frames back to Sweden, have the frames repaired to as new as possible, fit new wiring, avionics (CAT II for all), dual FMS, low weight interiors, LEDs, add ANC, modern insulation for noise. There's even scope for quieter modern propellers and engines, although that would require type certificate testing. The outcome would be basically 20-30 years more life for half the cost of a new aircraft, lets say around $5-$10mil a unit, depending on whats thrown in. The refitted aircraft would be CAT II, dual FMS, so immediate savings in fuel requirements, lighter weight, so less fuel burn again, as well as better uplift when full, with less offloads, and having new wiring and equipment means things are back under warranty and break down less often, again saving cost and adding to reliable service. That all does not include savings if new more efficient engines are found and retrofitted, such as the the PW-127 XT-S, which would offer large savings in fuel and additional power compared the GE-CT-7-9B. So over time the investment pays itself down until suitable, more efficient replacements are found.

Great idea, but the returns would be hard to justify the investment required to even get it to demonstration stage, let along certification. Saab nowadays is a military contractor so supporting the legacy commercial turboprops will likely go only as far as getting them to the end of life. Given the limited customer base, which is pretty much just Rex, unless Saab (or someone else) wants to proactively asset manage a '340NG' and create the market for them, it would be hard to justify in Stockholm.

An interesting idea. So for 60 airframes that would be between $300 and $600million. Add in the purchase price of the airline, that is a large investment in a loss making business.

Re-certification would only apply to a major change like changing the power plant, and the associated major work. The original SAAB 340B can be CAT II certified, it's already fitted to many of them, refitting the cockpit to glass is already an option. Renovating the airframe and fitting it out with modern interiors, ANC etc are all just engineering orders, not re-certification. Some of the US 340s were retrofitted with freon air conditioners in lieu of an APU as an example. And there are already approved low weight interior options, seats and fittings available for fitting.

It probably needed to be done 10 years ago, however, what options are there? A used ATR 42 will cost $10-$20 mil, a new one $20-$30mil, and they have a woeful reputation for extended life operation. I assume the new Dornier will come to market in the $20-$30 mil area as would a new SAAB 340NG. Those numbers are just the cost of doing business in aviation, you borrow the money and hope you can pay some of it down in the 20 years of operating, basically what every other airline does, except with much bigger numbers.

There is also the option of leasing aircraft, as many airlines do. No need to purchase.

Leasing is just getting somebody else to borrow the money for you, and handle the purchase and sale of the assets. In return they add their piece of profit and hopefully your government of choice offers a tax incentive for the inefficiency.

Leasing companies are the most profitable around.

Interestingly 14 of the top 15 aircraft leasing companies are based in Ireland.

Aercap made $3.1b in 2023 ,and 57% of aircraft worldwide are leased .

Ah, the joys of 'Double Irish' tax 'arrangements'. I'm guessing there's a 'Dutch sandwich' for a snack in there somewhere, too.

$3.1Bn does not make a company amongst the most profitable around. It wouldn't even get you in the Top 150 most profitable companies.

Welcome to the forum.

If you are going to play on here you must understand there are some very qualified people on here, some who think they are qualified and a large number of numpties.
My knowledge of finance is low but "made" does not really cut it as an accounting term.
​​​​​​​$3.1b was their NET INCOME, not their PROFIT.

All good- my background is qualified accountant ,with emphasis on analytical side of things.

I stopped working corporate side 15 years ago now, concentrating on research to provide income from shares going forward.

Analytical skills, or luck have been very fortunate in that regard ,including Qantas at moment.

Aviation leasing is very profitable due to high capital cost of planes ,and cash flow problems of most airlines to buy planes.

Bonza found that out to their demise imo(unsure if Rex owned or leased) ,other forum members may disagree ,and all good there.

Aviation leasing is a very simple business ,but has massive returns currently.

I realise reading replies on this forum that my background different to a lot of forum members here.

No dramas there ,as this is a pilot forum .

Have a great weekend.

Aercap would be reporting to EU accounting standards where "net income" is the equivalent of our "net profit".

AERCAP HOLDINGS N.V. (AER) is listed on the New York Stock Exchange (NYSE), not Nasdaq.

The two largest airlines by market cap, Delta and United, most assuredly do not own all of their fleets; both run mixed owned/leased fleets. Same same with IAG (7th by market cap), Singapore (9th) and Turkish (10th); IAG is moving to a 50/50 owned/leased fleet, Singapore are around 70/30 and Turkish presently around 80/20.

"A different perspective"? I guess t​​​hat's one way of saying "routinely wrong". And we've often seen the quality of your "research".

To the extent some forum members are "upset", it's because of poor research, and poorer interpretations leading to you to stating rank nonsense with the absolute certainty of an adolescent.

For better or for worse, many of us are afflicted with acquired afabulasia; that is, we're BS intolerant.

Thanks for the reply.

Let us see where the Qantas share price goes in the next 12 months.

I bought when reputational damage was at its worst and media/analysts stating shares were overvalued due to ageing fleet/broken brand.

Nobody seem to mention that Qantas owned their frames whilst competition including Bonza,Rex and Virgin did not.

They was also no mention of Qantas signing order with Airbus coming out of Covid at hopefully very favourable prices given state of airline industry at that time.

80% return to date ,and perhaps it was luck, but I am not selling based on my research.

Report in Australia Financial Review of continued elevated fares in golden triangle continue,with cheapest Qantas fare $1313 Sydney-Melbourne 1 way for yesterday-no other fares were available on Qantas.

They used Etihad as comparative example with flight Melbourne to Paris costing $1300 just 2 weeks ago.

Now that is a profit margin this accountant understands, and great for Virgin as well to be operating in this environment.

Why would u lease when you could buy is beyond me ,unless airline did not have the cash flow.

Ownership gives airline control and future borrowing power, simple as that.

We are of different mindsets and all good.

Leasing vs purchase depends on long term strategy and availability. Lease companies use scale to buy numerous production slots and then can offer them at lease rates comparable to what you would otherwise pay if you borrowed the money and purchased a small run of units at a higher price. If you are an accountant you would know there are certain tax benefits to leasing and to outright purchase. There is also the matter of how long you imagine you will be operating such aircraft, most modern jets are best kept under 10 years old to get the most from the latest efficiency gains. A 20 year old jet probably burns 10-20% more fuel and maintenance and parts costs are again large percentages higher. If you lease, you can sign the contract for 10 years, and then re-lease new machines and keep the fleet age as efficient as possible without having to deal with acquisition and sales costs. You might want to ask Hertz and a few other rental car agencies how their old strategy of purchase and sell vehicles at low kms has gone with their electric cars... I think Hertz is now down 4 straight consecutive losses into the billions due to the junk status of used Teslas and Polestars.

Aviation is one of those places where underlying profits mean nothing. An airline is constantly renewing fleet, brand, staff and everything else. There is never a point where you are just running without some form of change happening, if you are it means things are aging and losing value, so its false numbers, at some point you have to play catch up at more than whatever cost you saved by pinching pennies.

Ok, back on subject.

Heard an interesting rumour from a VA ground handler yesterday that VA are looking at acquiring REX. Possibly had its genesis in the BS John Sharp was spewing on the 4 Corners interview, or is there something else afoot?

And yes I know, a VA ground handler! But it is a rumour network.