Haha what will come first, administration or the court case...
It wouldn't be the first time they've found their parts in a park:
www.abc.net.au
B.....ut I thought Qantas was the "spirit of Australia". Or is it only the "spirit of capital cities of Australia". Ok OK maybe except for Hobart and Adelaide.
Sorry, "tenterhooks".
Which is exactly what has happened to Albury-Melbourne. On weekdays, Rex used to run 3 return services. I used them a lot, and they generally had reasonable loads. QF came in, and Rex pulled out entirely. QF runs one flight from Albury to Melbourne very early in the morning, and it comes back in the evening. Completely useless for most of us, and especially so for the specialists who used to come to Albury for the day. Even the train is a better alternative.
Where to start... If I were the investor I'd be pissed off given how much wasn't thought through:
| What Rex Proposed | Reality |
|---|---|
| Opportunity : Permanent changes to the global aviation with all airlines in the world practically grounded and most facing insolvency | There are more than 5000 ICAO airlines and CNN said just 64 were killed off during covid... (bonza doesn't count). |
| Opportunity : Seismic shift in Australian aviation following collapse of Virgin Australia ("VA") | Well we all know how that worked, it's incredible how sure Rex was that VA were going to collapse (more on that below). |
| Opportunity : Qantas ("QF") losing $40M a week and sinking heavily into debt to stay afloat | Now QF is posting a record profit and Rex is losing $143,000 per day. |
| Opportunity : Abundance of airport slots, infrastructure, aircraft, pilots, engineers coupled with ultra-cheap fuel | This is an odd one, no one could have honestly thought that fuel would remain as low as it did during covid, I remember filling up for under $1 per litre but knew that as soon as things reopened that price would jump again. Additionally someone on here mentioned that Rex slots in Sydney for the jets are just temporary international ones? |
| Opportunity : Moribund pax numbers in next 18 months favour new start up | No clue how they came up with this? |
| Strategy : Launch a domestic-only LCC++ hybrid airline to serve major trunk connections across Australia | The problem is they didn't launch a LCC++ hybrid carrier, they've got business class/lounges/free snacks/baggage etc it's more than a full service carrier in most places but they're having to sell at LCC prices. |
| Strategy : Offer competitive rates with Jetstar and 5-10% cheaper than Qantas | Very few routes they're actually competing with Jetstar, instead it's against Virgin and VA have been really good at responding by matching the ZL fare at the same departure time as VA. |
| Strategy : Start with 5 busiest routes ex Sydney to ensure quick profitability | They've actually never achieved this goal, the 5 busiest routes from SYD are MEL, BNE, OOL, ADL and PER. PER is still missing. |
| Strategy: Single fleet type using 737-800 with distressed lease rates | This is something that's come out a lot in the media today, sure they started with "distressed lease rates" but that's apparently all dried up and now they're apparently paying the same market rate as everyone else. |
| Strategy : Leverage on Rex's extensive network, infrastructure, management and systems to ensure low additional overheads | This is actually the most puzzling one, if you look at many major airports that ZL operate to they had to buy shiny new 737 capable equipment, the website had to undergo and upgrade and under the hood there were upgrades to sabre to get the booking system in a state capable of competing. |
Then Rex claimed VA had a "bloated management" (um hello Rex board overthrows), bad cost culture (I wonder if VA were losing $140k per day) and inefficient operations (I'll give them that on this last one). Finally they claimed that an experienced buyer could resolve the issues in 3 years but not fix all the above (although ironically it seems like Bain have).
Surprised that they lasted this long if that is the case
Tender hooks? Your spell-check has issues
onemileatatime.com
Here’s the thing though, proving it’ll be almost impossible and recently a lot of their golden triangle routes have been full. I’ve even been on a rare A330 from BNE to SYD that was 100% full.
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