ASIC sues Rex for allegedly misleading the market on company's profitability

I think I we spent the whole of 2022/2034 on here banging on about Rex and it’s poor loads and questionable monthly ‘unaudited’ results.

No surprises really. They have been withholding important information for considerable time. Many on here didn’t get fooled.
 
I do remember some on here and elsewhere across social media predicting that REX "will get VA" despite the documented poor loads on REX and questionable REX financials right up till the end and and subsequent close-down of REXJet.

Although VA has their own various problems which include recurring staff contract negotiations, those REX 'predictions' aged well indeed.
 
Ha! I was just thinking about this a couple days ago. Forget telling the market… what about telling the consumer?

We put money into the airline, got status, and then had it ripped away, losing all our benefits and miles in the process.

From my reading of Rex’s financial statements, it appeared that while the 737 ops might not have been profitable, the business as a whole was, and that the jet operations would be somewhat secure. They even launched a service to Perth!

All very nice that ASIC will sue directors… I wish the passengers could! I sue the directors for the value of my points.
 
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Ha! I was just thinking about this a couple days ago. Forget telling the market… what about telling the consumer?

We put money into the airline, got status, and then had it ripped away, losing all our benefits and miles in the process.

From my reading of Rex’s financial statements, it appeared that while the 737 ops might not have been profitable, the business as a whole was, and that the jet operations would be somewhat secure. They even launched a service to Perth!

All very nice that ASIC will sue directors… I wish the passengers could! I sue the directors for the value of my points.


I remember at the time post-Covid travel boom and Virgin, Jetstar and Qantas were self-imploding with lost baggage, lack of staff, huge check-in queues and lack of planes and mass flight cancellations domestically, and yet Rex still couldn't get off their butts and market themselves despite their competition self-sabotaging in front of their eyes. I recall some posters on here seeing Rex B738's take off half empty with terminals heaving with disrupted Qantas, Jetstar and Virgin passengers. Someone could have walked through T2 in SYD with a sign hung around their neck saying "flights to MEL leaving in 1-2 hours on-time with free baggage for $300". A few enterprising members on here cancelled their delayed QF VA or JQ flights and got last minute Rex jet flights but people are peculiar and sometimes get mentally anchored/tunnel vision with existing flight bookings and relationships to existing airlines.

With less psychotic top management and a decent marketing department, I think the actual front-line Rex staff and the airline would have been able to pull it off in that brief window when all the other airlines were self-destructing. Just goes to show bad/incompetent management can destroy any business no matter how good the economic tail-winds.
 
I remember at the time post-Covid travel boom and Virgin, Jetstar and Qantas were self-imploding with lost baggage, lack of staff, huge check-in queues and lack of planes and mass flight cancellations domestically, and yet Rex still couldn't get off their butts and market themselves despite their competition self-sabotaging in front of their eyes. I recall some posters on here seeing Rex B738's take off half empty with terminals heaving with disrupted Qantas, Jetstar and Virgin passengers. Someone could have walked through T2 in SYD with a sign hung around their neck saying "flights to MEL leaving in 1-2 hours on-time with free baggage for $300". A few enterprising members on here cancelled their delayed QF VA or JQ flights and got last minute Rex jet flights but people are peculiar and sometimes get mentally anchored/tunnel vision with existing flight bookings and relationships to existing airlines.

With less psychotic top management and a decent marketing department, I think the actual front-line Rex staff and the airline would have been able to pull it off in that brief window when all the other airlines were self-destructing. Just goes to show bad/incompetent management can destroy any business no matter how good the economic tail-winds.
lol… I’ve done all those things you mention.

Except the sign wouldn’t need to have said $300… they were still selling $79 fares even though the competitor terminals were overflowing with delays!!
 
So given the company is already insolvent, there isn't much left for ASIC, other than any Directors insurance.
Possibly the best case is getting future bans against some of the directors
 
A future ban against the directors would be ideal. It also may force EY to be a little more honest about the sale of 50% of NJE to LKH and co recently…
 
Though it is not all through Rex's actions.
First QF and VA hoarding slots so Rex couldn't access premium times.
Second JQ in 2021 transferring A320s from Japan and Singapore to Australia so that in 2024 They operated 38% more domestic seats in 2024 than in 2019. In the first half of 2024 they increased domestic seats by 13% - more than the total of the Rex seats. But the increases were mainly on the SYD-MEL and SYD-ADL routes.
Third this enabled QF to reduce it's capital city seats between 2019 and 2024 by 27% and increase regional seats by 45%.

So Rex got slaughtered by JQ on Capital City routes and screwed by QF on it's previously profitable regional routes.
 
Though it is not all through Rex's actions.
First QF and VA hoarding slots so Rex couldn't access premium times.
Second JQ in 2021 transferring A320s from Japan and Singapore to Australia so that in 2024 They operated 38% more domestic seats in 2024 than in 2019. In the first half of 2024 they increased domestic seats by 13% - more than the total of the Rex seats. But the increases were mainly on the SYD-MEL and SYD-ADL routes.
Third this enabled QF to reduce it's capital city seats between 2019 and 2024 by 27% and increase regional seats by 45%.

So Rex got slaughtered by JQ on Capital City routes and screwed by QF on it's previously profitable regional routes.
Rex had more flights than it could fill, including at peak times. Access to slots wasn't the problem - it was just one of the many things Rex whinged about rather than running its business well. AFF ran quite an interesting article about it: Opinion: Why Rex's 737 Experiment Failed
 
With JQ undercutting it on capital city routes and QF adding 45% capacity on regional routes meant even if Rex had a competent board things were stacked against. Slots were just one more thing as being denied slots when the flight times were more profitable.
 
My experience is based on the MEL-SYD route, which I flew weekly. The only thing ‘missing’ from the Rex schedule in terms of commuting was a 7pm MEL-SYD. They had an 8pm instead.

The major flaw IMO was the complete lack of advertising. Most people at the office thought Rex only flew saabs - ‘how long does it take you to fly to Sydney in one of those?’ was the most common question.

While you could put the failing down to bad luck, it seems more and more you could also put it down to a lack of competence.

As for JQ offering more services..l theyre damned if they do, and damned if they don’t. The airlines were heavily criticised for not having enough capacity after covid to meet the massive uplift in demand. Can’t blame them for actually putting it on.

The only thing I thought was a bit unfair… that didn’t pass the pub test, was VA matching the $99 fares to perth, but only on the exact matching flight times. That wasn’t competition… that was just trying to eliminate the competition.
 
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Didn’t Rex themselves say that the entire premise of the 737 operation was based upon Virgin collapsing, and staying that way. As soon as they were resurrected, it was only a matter of time.
 
Most of my relies I've spoken to didnt know REX flew "non-turbo props" and didn't know they flew between capitals, only regional and they were overpriced.

Clear marketing failure, mismanagement and arrogance. No use spouting "build it and they will come" if no-one knows you built it.
 
First QF and VA hoarding slots so Rex couldn't access premium times.
Airport coordination Australia commented on this a few months ago.
‘REX had all the slots they needed at Sydney, slots was not the issue, they even handed back additional jet slots they were not planning to use’
 

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