Rex in voluntary administration, ending all 737 services

[TheInsider]

Tough day for those employees that were stood down. I hope they all find new jobs at VA/JQ/QF quickly, but I think the economy and the job market is heading for the worst given the persistent high interest rates.

A lot of these workers are ex QF and VA anyway during the covid era. Many of the QF employees received a pay out.

 

[MEL_Traveller]

I dunno, but when reading the agreement between VA and ZL I got the feeling that while VA (and now QF) will be providing replacements flights, they’ll be getting paid by ZL for those flights?

I mean, 30,0000 forward bookings = around $3 million that must be sitting in Rex’s accounts somewhere? I thought they’d be using that to pay VA and QF?

 

[TheInsider]

I dunno, but when reading the agreement between VA and ZL I got the feeling that while VA (and now QF) will be providing replacements flights, they’ll be getting paid by ZL for those flights?

I mean, 30,0000 forward bookings = around $3 million that must be sitting in Rex’s accounts somewhere? I thought they’d be using that to pay VA and QF?

Maybe to VA, but QF ain't getting anything AFAIK.

 

[jase05]

I dunno, but when reading the agreement between VA and ZL I got the feeling that while VA (and now QF) will be providing replacements flights, they’ll be getting paid by ZL for those flights?

I mean, 30,0000 forward bookings = around $3 million that must be sitting in Rex’s accounts somewhere? I thought they’d be using that to pay VA and QF?

Can’t pay their staff so I doubt VA or QJ will see a cent.
The goodwill and positive PR is probably worth as much though

 

[Saab34]

Doubt administrators would pay someone to move the passengers. Passengers are creditors. That can become a legal minefield, shuffling money around in the back. Sending a few million on the side over to Virgin while in Administration would be hugely problematic to the creditor queue and would be a legal nightmare.

 

[p--and--t]

I dunno, but when reading the agreement between VA and ZL I got the feeling that while VA (and now QF) will be providing replacements flights, they’ll be getting paid by ZL for those flights?

I mean, 30,0000 forward bookings = around $3 million that must be sitting in Rex’s accounts somewhere? I thought they’d be using that to pay VA and QF?

Seriously doubt that.

ZL are in administration & have creditors lining up for unpaid bills.

How can they justify more spending on creditors at near full odds when they are likely to only get cents in the dollar in the washup if ZL gets wound up.

 

[RSVKanga]

reporting that Rex will continue to fly to Armidale. Maybe someone should tell them or the Rex press officer that they pulled out of this route last year due to shortage of spare parts.

Wait until you skip to 0:46 in this video.

 

[oz_mark]

Seriously doubt that.

ZL are in administration & have creditors lining up for unpaid bills.

How can they justify more spending on creditors at near full odds when they are likely to only get cents in the dollar in the washup if ZL gets wound up.

I doubt Virgin are getting paid directly. I also doubt ZL will get wound up, just seems to be a high stakes game of poker in the boardroom

 

[flyer89]

I suspect REX will be ok once the jet experiment is wound up. I didn’t realise they had many as they did and I’m suprised it lasted this long.

Still, it doesn’t solve their fleet replacement problems down the track. ATR’s are the only thing I can think of that comes close however, they are considerably larger. Embraer haven’t produced the 120 in a long time either.

 

[MEL_Traveller]

Seriously doubt that.

ZL are in administration & have creditors lining up for unpaid bills.

How can they justify more spending on creditors at near full odds when they are likely to only get cents in the dollar in the washup if ZL gets wound up.

as oz_mark says, not sure it will get wound up. The other parts of the business and air ambulance etc are presumably profitable.

 

[Cool Cat Phil]

Better late than never

And QF are offering a greater booking window than what VA are offering. VA bookings currently close off 14/8/2024 V QF 31/8/2024.
Like the administration of Bonza QF had the longer booking window.

 

[Cool Cat Phil]

Wait until you skip to 0:46 in this video.

Too funny, someone must have dug out some of the former boardroom’s wacky ideas for flying international.

 

[henrus]

And QF are offering a greater booking window than what VA are offering. VA bookings currently close off 14/8/2024 V QF 31/8/2024.

QF is them not wanting to miss out but going in blind. The ZL/VA deal resulted in ZL providing VA with the details of all their jet bookings through to end of schedule (allowing VA to verify bookings are legit). Internal Virgin Australia discussions regarding the ZL jet collapse apparently started well before collapse. The Virgin Australia CEO apparently gave an update to Virgin staff today about this ZL issue but it’s public knowledge and shared via VA Facebook they’ve been swamped by ZL rebooking requests.

 

[RooFlyer]

Article in the Australian on-line (paywalled)

Rex, Virgin, Qatar: Time for the government to let the right airlines deal get done

Ignoring the inevitable QR tag, its quite the take-down of Lim Kim Hai. A few snippets from a lengthy article:

Lim Kim Hai, the Singaporean businessman who ran Rex as executive chairman until June this year displayed remarkable hubris (even in the context of airline bosses) by assuming Rex would become the No.2 carrier when Virgin failed during the pandemic.

Pitch documents produced at that time and obtained by The Australian show Mr Lim believed Rex would have unfettered access to become the second biggest airline with a “37 per cent market share” and even EBAs “pegged at 10 per cent below Jetstar”.

It wasn’t the first time Mr Lim’s exuberant optimism had come to the fore. The Australian understands he had previously tried to sell Rex to Qantas 16 years ago – with Qantas quickly deciding the competition regulator wouldn’t approve the deal; and then tried to sell the airline to Virgin just a couple of years later, threatening to play the airlines off against one another. It failed.

The Albanese government should not give the airline another significant cash injection.

Indeed it has said it’s “reluctant to throw money at the problem”.

Instead, the Prime Minister should let market forces do their work and allow a Qatar/Virgin tie-up to proceed, which would then give Virgin enough money to absorb Rex.

Virgin chief executive Jayne Hrdlicka said she would not comment on market speculation and it appears unlikely she has made an approach to the government about Qatar. Yet.

There's a lot more. Try to read it all.

So if a deal was to proceed with Qatar, how would it work?

 

[HS-TQE]

REX's Private Equity partners PAG turning on LKH through overthrowing him at a board meeting and then declaring Voluntary Administration 2 months later shortly after LKH declares a leadership spill would also be quite the "take down" / bail move by a Private Equity firm.

 

[justinbrett]

Why must every thread end up discussing QR?

 

[nancypants]

In terms of fleet replacement, could they go smaller? Caravans with 9-13 seats?

 

[MEL_Traveller]

Just read that staff might have to wait months for payment and redundancy payouts? If that’s the case, it’s disgraceful. Workers should have wages protected!

 

[RSVKanga]

QF is them not wanting to miss out but going in blind. The ZL/VA deal resulted in ZL providing VA with the details of all their jet bookings through to end of schedule (allowing VA to verify bookings are legit). Internal Virgin Australia discussions regarding the ZL jet collapse apparently started well before collapse. The Virgin Australia CEO apparently gave an update to Virgin staff today about this ZL issue but it’s public knowledge and shared via VA Facebook they’ve been swamped by ZL rebooking requests.

The more I think of it, this whole Rex jet experiment might have been secretly in collaboration in VA in a failed attempt to collectively challenge Qantas through the idea of "enemy of an enemy is a friend".

People can call it a conspiracy theory however many times they want, but;

• There was an unprecedentedly high level of sophistication when it came to transferring affected Rex passengers onto VA with Rex seamlessly handing VA the details of all affected passengers
• VA were very quick to announce they're acquiring the ZL 737s - again there are so many 737s in the world they could have chosen, but they chose ZL's
• Talks that VA were allegedly briefed by ZL about potential collapse in the weeks before the public/media knew
• VA's announcement today that they are considering bringing Rex into Velocity and codeshares

...is all very suspicious when you combine it with the fact that Rex made absolutely zero criticisms of VA when VA launched predatory fares on the MEL-PER route after Rex announced they would be flying the route. Yet Rex complains when QF competes with them and charges normal fares. John Sharp has also made no criticisms of Jayne Hrdlicka or VA in the media. Why did Rex stop flying SYD-CBR only a couple of months after VA resumed flying the route back in 2022, and yet when Rex exited that route there were no jibes directed at VA?

I'm not suggesting a serious financial-oriented deal, rather an informal backroom "the enemy of an enemy is a friend" handshake between VA and Rex a few years ago, which has quite clearly failed. Both VA and Rex have had damaging hits towards them in this last fortnight with the axing of the former's long haul routes and the latter's collapse of their jet business.

 

[HS-TQE]

Why did Rex stop flying SYD-CBR only a couple of months after VA resumed flying the route back in 2022, and yet when Rex exited that route there were no jibes directed at VA?

They did blame VA indirectly for their exit from SYD-CBR through an "additional operator", even though VA employed Link Airways to operate the SYD-CBR services for them through wet-lease.

https://www.rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=2F52426A6C774D6549697136636D7976366E744347726D534C496C50677854545034562B6A585371336A714143314E3438492B4B7353663076506245317A4F35