Regional Express alliance?

[Noob]

Virgin Australia already has some sort of agreement with REX to allow seamless connecting flights between the networks, but wouldn't it make sense if VA is wanting to grow their regional network for the two airlines to codeshare? Like the Skywest agreement some of the SAAB-340 aircraft could be painted in the VA livery. REX's main competitor is QantasLink, and one would think having an alliance with VA would help make REX a more attractive option?

Rex has an impressive network throughout the eastern states:

from Adelaide, South Australia

• Broken Hill, New South Wales
• Ceduna, South Australia
• Coober Pedy, South Australia
• Kingscote, Kangaroo Island, South Australia
• Mount Gambier, South Australia
• Port Lincoln, South Australia
• Whyalla, South Australia

from Melbourne, Victoria

• Albury, New South Wales
• Burnie (Wynyard), Tasmania
• Griffith, New South Wales[SUP][13][/SUP]
• King Island, Tasmania
• Merimbula, New South Wales
• Mildura, Victoria
• Mount Gambier, South Australia
• Wagga Wagga, New South Wales

from Sydney, New South Wales

• Albury, New South Wales
• Ballina, New South Wales
• Bathurst, New South Wales
• Broken Hill, New South Wales
• Dubbo, New South Wales
• Grafton, New South Wales
• Griffith, New South Wales
• Lismore, New South Wales
• Merimbula, New South Wales
• Moruya, New South Wales
• Narrandera, New South Wales
• Orange, New South Wales
• Parkes, New South Wales
• Taree, New South Wales
• Wagga Wagga, New South Wales

from Townsville, Queensland

• Mount Isa, Queensland
• Julia Creek, Queensland
• Richmond, Queensland
• Hughenden, Queensland
• Longreach, Queensland
• Winton, Queensland

 

[777]

I read somewhere (have no source I can find) that JB offered the skywest deal to REx and they weren't interested in it. But yes, it would make sense.

 

[LiamR]

I'm not sure if Virgin would be interested in purchasing Rex. They aren't looking so good as a company, and the aircraft are very old and nolonger made.

As an Alliance? Perhaps. They have been revaming the FF program for some time now and I was expecting if they were to form an alliance, it would have been announced on Thursday.

 

[Noob]

I'm not sure if Virgin would be interested in purchasing Rex. They aren't looking so good as a company, and the aircraft are very old and nolonger made.

As an Alliance? Perhaps. They have been revaming the FF program for some time now and I was expecting if they were to form an alliance, it would have been announced on Thursday.

Oh no, i never meant for VA to purchase Rex which i agree wouldn't probably be worth it as like you said their infrastructure is old and will eventually require a big investment to renew - if anything it would be a massive burden on VA for the foreseeable future.

But in terms of an alliance, yes I think it would benefit both parties - I thought the same regarding Rex's FF program which hasn't accepted new members for over two years under the cover of "being revamped".....It makes sense for Rex to become a Velocity Frequent Flyer partner.

Also, Rex and VA are often in the same domestic terminals so VA Lounges could be expanded and shared between the carriers.

 

[drron]

I'm not sure if Virgin would be interested in purchasing Rex. They aren't looking so good as a company, and the aircraft are very old and nolonger made.

As an Alliance? Perhaps. They have been revaming the FF program for some time now and I was expecting if they were to form an alliance, it would have been announced on Thursday.

Well they made a profit and paid a dividend-something QF and DJ shareholders would envy-
Rex profit dampened by bad weather - National Rural News - Agribusiness and General - Finance - Stock & Land

However, revenue growth over the full year for the group's total operations, including Pel-Air, Air Link and the Australian Airline Pilot Academy, lifted almost five per cent and the company achieved a 15pc return on net assets.

Rex, which has a fleet of more than 40 Saab 340 aircraft, flies to 35 regional destinations around eastern Australia, also has strong cash holdings, only $29m in debts and a minimal capital expenditure requirement in the coming year.
Rex shareholders will receive a 7.1 cents a share final dividend.

And a lot of the fleet were acquired from 2007-2010 and are ex American Eagle.

 

[markis10]

As raised in another thread, what is going to happen with fleet replacement, there isn't one.

 

[MarkD]

I agree an alliance would be great, and for me personally, I would have all my destinations covered without QF needed.
However, I dont think an alliance would be in their interests now. They have commited to the (18?) new ATRs via skywest, which will more than fill the routes required.
Also would be very interesting to have Skywest, Rex (Kendall) Singapore and Air NZ on board. You think we dont have another Ansett??????

 

[Deleted member 29185]

How deep is SRBs pockets?

Any company that tries to grow too big too quickly, usually fails.

 

[Noob]

How deep is SRBs pockets?

Any company that tries to grow too big too quickly, usually fails.

Good point.

 

[Justchecking]

Has SRB ever made an additional investment in DJ beyond the start-up capital and some media appearances? I was under the impression that was a no.

 

[Noob]

Has SRB ever made an additional investment in DJ beyond the start-up capital and some media appearances? I was under the impression that was a no.

His company (virgin group) only owns about 20% of VA - the majority of VA is australian owned.

 

[markis10]

His company (virgin group) only owns about 20% of VA - the majority of VA is australian owned.

26% actually, with NZ at 14.9%, and foreign ownership sitting at 48.25%

 

[MarkD]

The Answer is no. SRB put (10 Mill ??) up front to kick off, IIRC then set it free, selling his shares as the company grew.
Thats why he is one of the best, if not the best business man in the world. That is obviously my opinion only, and others will disagree.

 

[777]

26% actually, with NZ at 14.9%, and foreign ownership sitting at 48.25%

NZ is part of the foreign ownership isn't it? From memory there were some issues when their first round of purchases inadvertently pushed VA above the "majority Australian ownership" cap required for their international rights.

 

[markis10]

NZ is part of the foreign ownership isn't it? From memory there were some issues when their first round of purchases inadvertently pushed VA above the "majority Australian ownership" cap required for their international rights.

Yes they are part of the cap, although I am not sure if they are really foreign!

 

[777]

Yes they are part of the cap, although I am not sure if they are really foreign!

I think foreign ownership restrictions in Australia generally excludes kiwis but international air rights aren't that subtle. It's either majority owned by country of origin or it's not.

 

[markis10]

I think foreign ownership restrictions in Australia generally excludes kiwis but international air rights aren't that subtle. It's either majority owned by country of origin or it's not.

Come to think of it, it must exclude Kiwis, otherwise they would not have got Ansett, or maybe it changed because they got Ansett....

 

[oz_mark]

Come to think of it, it must exclude Kiwis, otherwise they would not have got Ansett, or maybe it changed because they got Ansett....

Ansett Australia and Ansett International were actually two separate companies, and the Kiwi's only ever owned 49% of Ansett International.

 

[markis10]

Ansett Australia and Ansett International were actually two separate companies, and the Kiwi's only ever owned 49% of Ansett International.

I was talking about Ansett Holdings, the parent company of Ansett Australia and Ansett International, all of which was 100% Air New Zealand, what makes you think it was otherwise, especially given the letter of comfort Air NZ offered AAH, AIL and AHL?

 

[777]

I was talking about Ansett Holdings, the parent company of Ansett Australia and Ansett International, all of which was 100% Air New Zealand, what makes you think it was otherwise, especially given the letter of comfort Air NZ offered AAH, AIL and AHL?

From memory that was the reason Ansett international had to be set up as a separate company: So they could access international air rights ex Australia.