Rex in voluntary administration, ending all 737 services

[UP4014]

Do the other shareholders have any recourse other than watching the bonfire?

Sell.

If it dips under .43 might be worth putting a small amount (expect to lose it though) in with the hope there might be an international airline buyer

 

[RSVKanga]

Sell.

If it dips under .43 might be worth putting a small amount (expect to lose it though) in with the hope there might be an international airline buyer

The question is who will want to buy it?

Apart from the cash-bleeding old 737s, they also have about 60 Saabs which are on average three decades old, half of which are parked and I’d bet a considerable amount of those parked ones aren’t even airworthy. Those aircraft also haven’t had a perfectly good safety record in recent years as well. Is this really appealing for a buyer to inherit? It’s not five or six of these planes, it’s 60. What’s worse is that they don’t have any active replacement plans for those aircraft. In fact there is no master plan or future direction for the company as a whole.

The whole brand has been run into the ground and is essentially worth absolutely nothing.

 

[Saab34]

Pull out the J, increase Y, lower prices.

Most of these Jet routes skew hand baggage only . The last SY-ML flight I did with them, which was full might I add (sun night), was only probably 20 of us waiting for baggage.

Offer a Hand Baggage only fare, that will bring pricing down a bit closer to Jetstar, and they should gain more customers. Especially off peak. I’ve picked some last minute JQ fares recently on the triangle, $60/70. Rex was $100/$110. If they had been $80 ish I would have opted for them. The Jetstar A321 I went out on was full, Rex had about 40 people.

 

[Must...Fly!]

The problems are of their own making. Hardly any market recognition (though at least they have a marketing campaign now) and the only part of the business which they could use to pay for this jet experiment has been left to rot.

What were the discussions when they were adding more 737s to the fleet, I wonder.

Let's not even mention the frequent flyer program.

 

[Saab34]

and then we have this nonsense. $1b valuation expectation on its FF program. How is that even remotely possible. The current valuation, is essentially zero. The FF program is as basic as basic can get.

Regional Express earmarks the eventual value of its frequent flyer program at between $1 billion and $1.6 billion “in 3-4 years” after capital city flights commence

 

[moa999]

The other big player other than LKH is PAG who own all/ most of the convertible notes.

I haven't looked greatly into all the terms but assuming these have been mostly drawn down, they are potentially the largest shareholder.

 

[henrus]

and then we have this nonsense. $1b valuation expectation on its FF program. How is that even remotely possible. The current valuation, is essentially zero. The FF program is as basic as basic can get.

Basic maths. The QFF program is valued at $6 billion and VFF is $2 billion. Rex is about 6x smaller than QF and 2x smaller than VA, that must be how they came up with it

What they're missing out on is that QFF has 14 million members and VFF has 11 million. I wouldn't be surprised if Rex has less than 100k plus they lack the ability to buy toasters with your points something that both QF/VA offer in many different shapes and colours:

 

[MEL_Traveller]

…. plus they lack the ability to buy toasters with your points something that both QF/VA offer in many different shapes and colours:

but you can get an award ticket on any of the major trunk routes for 7600 points within a few hours of travel!

Very handy if you need something last minute, and because it’s a last minute purchase, no cancellation fees or other restrictions.

 

[henrus]

but you can get an award ticket on any of the major trunk routes for 7600 points within a few hours of travel!

Very handy if you've already flown Rex quite a bit and spent $1480 on saver fares ($1058 on flex fares or $2466 on promo fares) but without a transfer partner for most it's not like they can stump up a random 7400 points.

 

[Aussie_flyer]

I have been a big fan of flying with Rex on the 737s, I am hoping it can be turned around. The hard product is actually great, lovely crews, good reliability. They are a pleasure to fly with.

 

[henrus]

On a different note, can we just admire the photoshopped stock images on their homepage right now:

Rex page the tile for Rex Flyer:


Stock photo from Getty Images:

Flying etiquette from a frequent traveller – Lonely Planet

Flying is tough. But there are a few ways in which flying would be better if we could all just be a little more mindful of flying etiquette.

www.lonelyplanet.com

 

[N860CR]

On a different note, can we just admire the photoshopped stock images on their homepage right now:

Rex page the tile for Rex Flyer:
View attachment 399428

Stock photo from Getty Images:
View attachment 399429

Flying etiquette from a frequent traveller – Lonely Planet

Flying is tough. But there are a few ways in which flying would be better if we could all just be a little more mindful of flying etiquette.

www.lonelyplanet.com

“We’ve activated the 2 week free trial so we are sure as hell going to use it!!”

 

[RSVKanga]

Like what happened with Bonza, there’s usually a point in time where the most of the Australian public find out about an airline’s woes as more articles are published, and stop booking flights on that airline for anything that is beyond the next few days due to the fear of it collapsing, and hence kills all the remaining cashflow.

I think Rex are very close to reaching that point of no return.

 

[jb747]

I'm a bit sad to see them reaching this state, as I used them a lot to fly between Albury and Melbourne when I was still working. But, as soon as they mentioned 737s the writing was on the wall. As best I can tell, their entire plan was based upon Virgin collapsing, and staying that way.

 

[antycbr]

Like what happened with Bonza, there’s usually a point in time where the most of the Australian public find out about an airline’s woes as more articles are published, and stop booking flights on that airline for anything that is beyond the next few days due to the fear of it collapsing, and hence kills all the remaining cashflow.

I think Rex are very close to reaching that point of no return.

Indeed, when it breaks out of the “Business” section of the news people will stop buying tickets.

 

[UP4014]

The question is who will want to buy it?

Apart from the cash-bleeding old 737s, they also have about 60 Saabs which are on average three decades old, half of which are parked and I’d bet a considerable amount of those parked ones aren’t even airworthy. Those aircraft also haven’t had a perfectly good safety record in recent years as well. Is this really appealing for a buyer to inherit? It’s not five or six of these planes, it’s 60. What’s worse is that they don’t have any active replacement plans for those aircraft. In fact there is no master plan or future direction for the company as a whole.

The whole brand has been run into the ground and is essentially worth absolutely nothing.

There is another business somewhere which will be in the acquisition cycle and if commercial terms align, it works.

 

[MEL_Traveller]

Indeed, when it breaks out of the “Business” section of the news people will stop buying tickets.

If i read it right the jet operation is losing $68k a day? They can make that up with 20 more people per flight.

A bit of marketing should realise that?

Or they could halve their business class fares! $200 each way, and don’t upgrade! That already gets them around half the additional revenue per flight they need.

 

[jb747]

I wonder how many people they’ve burned with cancellations. I tried to use them but they cancelled the flight, without an alternative, and the refunded less than the cost of the ticket. Alan would have been proud of the mathematics.

 

[antycbr]

If i read it right the jet operation is losing $68k a day? They can make that up with 20 more people per flight.

A bit of marketing should realise that?

Or they could halve their business class fares! $200 each way, and don’t upgrade! That already gets them around half the additional revenue per flight they need.

They could do lots of things but they need to do them quickly.

Don’t discount the power of the airline loyalty programs as well keeping people from booking ZL, even if they are cheaper.

 

[henrus]

Don’t discount the power of the airline loyalty programs as well keeping people from booking ZL, even if they are cheaper.

It's not just the loyalty program but the fact that people don't even think about them when going to book a SYD-BNE, SYD-MEL flight etc. Our work system doesn't always show ZL flights (I don't know why and it's nothing to do with agreements either) and I've got family members who head directly to the Jetstar website to start their search (amusingly even if QF or VA is cheaper).