Rex accuses Qantas of predatory behaviour, withdraws from routes

[jakeseven7]

Anyone up for another round of bingo?

View attachment 271865

(I've previously posted this bingo card in another thread.)

Sad how it’s still applicable really

 

[Harrison_133]

https://cdn-api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4

Link to the financial report.

Anyone up for another round of bingo?

Looks like we got a few hits. They of course have a nice little paragraph about Qantas being anti-competitive and trying to ‘intimidate’ Rex on ‘marginal’ regional routes.

Two notable things:
- Average LF for 1H FY 2022 was 53.4%. Obviously Saab & 737 flying is mixed, but it would be interesting to see what the figure would be split.
- They’ve used $75m of their loan from PAG for the jet ops already.

Whatever happened to Rex's lawyers, anyway?

“Exploring all legal avenues.”
Still? Are they realising they don’t have much of a case…. And John has been awfully quiet with the anti-QF rhetoric of late. Have Rex finally discovered it doesn’t cut through to the general public?

 

[jakeseven7]

And John has been awfully quiet with the anti-QF rhetoric of late. Have Rex finally discovered it doesn’t cut through to the general public?

There are rumours there was a legal letter exchange that resulted in him being muzzled....

 

[Andrew Curran]

That's the briefing time. Good on it for having an in-premises attendee option, not just a virtual meeting.

Most ASX-listed companies release such results to the market between 0830 and 1000 AEDT (or AEST in 'normal' time).

That in-premises site (a Mascot hotel) is owned by the Singaporean Chairman of Rex, so it's all keeping it in the family, so to speak.

 

[Must...Fly!]

MEL-ABX gone.

https://rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=744D363554335774503136764B4E306346374F617A6431462F51474A4C376B71504C7049394C69314432466643516177556F576C65706C5A36774C71794A303531584E67746170474967474F6D70746C3565727865513D3D

Losing the jet battle not enough, it seems. The excuses are equally absurd, and I presume this is some lame attempt at proving some point to the ACCC.

 

[Jacques Vert]

That press release states Rex "do not have the balance sheet to lose money indefinitely". If that's the case, it doesn't bode well for the Jet services. I hope Rex survives and to do so I think they need to get rid of Sharp.

 

[clifford]

And Bonza think they can do better without any Regional feed? Good luck...

 

[dajop]

And Bonza think they can do better without any Regional feed? Good luck...

Don't understand this statement. Bonza is doing something completely different to Rex, and only looking at regional markets and assiduously trying to avoid direct competition on non-stops with any of the other carriers (with a few exceptions).

 

[henrus]

Ok credit where credits due... at least rex has a website that you can book on. I think we're not giving QF/JQ/VA/ZL enough credit for that.

 

[jakeseven7]

MEL-ABX gone.

https://rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=744D363554335774503136764B4E306346374F617A6431462F51474A4C376B71504C7049394C69314432466643516177556F576C65706C5A36774C71794A303531584E67746170474967474F6D70746C3565727865513D3D

Losing the jet battle not enough, it seems. The excuses are equally absurd, and I presume this is some lame attempt at proving some point to the ACCC.

That press release is a free breakfast for QF’s lawyers. Expect a lawsuit (or a very stern legal letter) arriving at Rexy land HQ soon…

 

[Virgin Bart]

I do wonder why all the Rex bashing around there sometimes. Isn't it very clear that Qantas are using their deep pockets to drive Rex out from routes only they've serviced for years?

 

[jase05]

I do wonder why all the Rex bashing around there sometimes. Isn't it very clear that Qantas are using their deep pockets to drive Rex out from routes only they've serviced for years?

Maybe if Rex had stuck to that and not got into the jet game things might be different

 

[dajop]

I do wonder why all the Rex bashing around there sometimes. Isn't it very clear that Qantas are using their deep pockets to drive Rex out from routes only they've serviced for years?

It's not AFF unless you're criticising someone! But from what you say, it is pretty clear what Qantas are doing.

I guess the question is did "Rex kick and own goal" or did they "poke the bear"? Would QF have entered these routes had Rex not started Jet services in direct competition with QF? We won't know.

I wonder with the aircraft not being used for MEL-ABX, are there are other routes Rex could look at, for example, BXG-ADL? Or is this exit just an excuse for aircraft needed elsewhere already?

 

[Virgin Bart]

Fair points about Rex's foray into jets. Hadn't thought of that.

It's almost made me feel uncomfortable when I hear announcement after annoucement by QF which pretty much ticks off route after route of ZL's.

 

[muppet]

Don't understand this statement. Bonza is doing something completely different to Rex, and only looking at regional markets and assiduously trying to avoid direct competition on non-stops with any of the other carriers (with a few exceptions).

agreed. Bonza is creating new markets, not trying to pick at the dead carcass of existing flooded markets.

 

[muppet]

<snip>

I guess the question is did "Rex kick and own goal" or did they "poke the bear"? Would QF have entered these routes had Rex not started Jet services in direct competition with QF? We won't know.

</snip>

I think the answer is very most probably yes, the rona set about a situation where QF has no better use for a bunch of its Q300 fleet. It would have happened anyway, but Rex would have been better placed to compete if it didn’t sink $100m clams into a losing jet operation. (Which personally I love because paying pre-rona economy fares to fly VA business is great!)

Rex has never wanted to compete regionally, and when competition arrives, everyone jumps at the opportunity to fly with an airline with a frequent flier program, connections to …. well everywhere, and a lounge on the way home.

 

[jakeseven7]

Fair points about Rex's foray into jets. Hadn't thought of that.

It's almost made me feel uncomfortable when I hear announcement after annoucement by QF which pretty much ticks off route after route of ZL's.

There was a really interesting analysis of this by an analyst on ABC News Radio the other morning which I thought I would share.

Basically she was suggesting it is in QF’s interest to keep both Rexy and VA2 around - because they are both attacking the same lower end customer and keeping each other weakened / as VA2 has to keep matching and discounting to Rexys low fares, which is degrading VA2’s margin and Rexy has to keep discounting to try and drive traffic on their flights.

It was quite an interesting take that makes sense.

While Rexy is flopping around burning money they won’t be able to afford to maintain all their regional routes which will kick more customers QF’s way - who can fly profitably at lower loads.

And while VA2 is forced to fend off Rexy by massive ongoing discounting they are stunning their ability to grow / become viable for sale again because they are so marginal, while QF continues to pull all the premium, business and corporate higher yielding passengers.

I guess the thing that will determine survival in the Rexy v Bain/VA2 death match is who has the deepest buckets of cash. Or if as many have suggested cooler heads prevail and the two join forces.

 

[1022]

There was a really interesting analysis of this by an analyst on ABC News Radio the other morning which I thought I would share.

Basically she was suggesting it is in QF’s interest to keep both Rexy and VA2 around - because they are both attacking the same lower end customer and keeping each other weakened / as VA2 has to keep matching and discounting to Rexys low fares, which is degrading VA2’s margin and Rexy has to keep discounting to try and drive traffic on their flights.

It was quite an interesting take that makes sense.

While Rexy is flopping around burning money they won’t be able to afford to maintain all their regional routes which will kick more customers QF’s way - who can fly profitably at lower loads.

And while VA2 is forced to fend off Rexy by massive ongoing discounting they are stunning their ability to grow / become viable for sale again because they are so marginal, while QF continues to pull all the premium, business and corporate higher yielding passengers.

I guess the thing that will determine survival in the Rexy v Bain/VA2 death match is who has the deepest buckets of cash. Or if as many have suggested cooler heads prevail and the two join forces.

The slight fly in that ointment for QF is that previously loyal QF flyers (such as yours truly) are looking at the QF fare premium and questioning the ongoing value proposition. Especially when
A) QF has been doing all it can of late to degrade the customer experience; and
B) J fares on VA can be had for not dissimilar rates to some Red-e fares on QF if you’re flying at certain times of the day or week

 

[UP4014]

I think the answer is very most probably yes, the rona set about a situation where QF has no better use for a bunch of its Q300 fleet. It would have happened anyway, but Rex would have been better placed to compete if it didn’t sink $100m clams into a losing jet operation. (Which personally I love because paying pre-rona economy fares to fly VA business is great!)

Rex has never wanted to compete regionally, and when competition arrives, everyone jumps at the opportunity to fly with an airline with a frequent flier program, connections to …. well everywhere, and a lounge on the way home.

I think spot on, QF using excess aircraft to cover new routes. REX wants to compete against private car use not other airlines.

 

[jakeseven7]

The slight fly in that ointment for QF is that previously loyal QF flyers (such as yours truly) are looking at the QF fare premium

Most of QF's premium / business / corporate customers, the ones that contribute to their yield are not really that concerned about $50 retail rate differences here or there was the argument. Which from my experience is very true.