Rex in voluntary administration, ending all 737 services

[henrus]

They seem to be having reliability issues with the Saab operation at the moment, particularly out of Melbourne.

Genuine question, what percentage of the saab fleet is actually operational?

Plane spotters says Rex has 57 of them and only 34 are listed as in service.

 

[RSVKanga]

Genuine question, what percentage of the saab fleet is actually operational?

About half.

 

[Harrison_133]

Plane spotters says Rex has 57 of them and only 34 are listed as in service.

That would be about right. Planespotters will list an aircraft as parked if it hasn't flown in the last 7 days, although if you look at the Rex Saab's that are listed as parked, they've been parked for much longer.

 

[henrus]

I guess a better question I should have asked: what % of the parked aircraft are airworthy?

 

[eastwest101]

The other issue is really all about a suitable replacement for the Saab 340 aircraft in the long run, a 1 for 1 replacement not even on the design table yet - let alone flying. As others have pointed out the Federal Government has finally come to its senses about regional airport screening so any new replacement to Rex such as an Airlink, Alliance, QantasLink, FlyPelican or others will either need to acquire and fix a lot of Saab 340s in the short term, and also get on the second-hand market ASAP for Dash 8 and/or ATR42s to be able to have a reliable fleet replacement. Rex itself has an AOC, and a lot of pilots and crew, so the front-line staff are really one of the main assets that will be needed by any Rex replacement. The various state governments will also have to be quick to reconfigure any contracts they have to serve remote and regional routes so that would be SA NSW QLD and WA if the worst should happen and Rex ceases operations. The Saab 340 is really the right sized aircraft for a lot of smaller towns.

Could Bain take a look at Rex if it falls into admin? Strip the Jet assets out and return to Virgin to solve their own aircraft and crew shortage, and then maybe get the government on the hook for a relaunched Saab 340 or other Dash 8/ATR regional operation, or alternatively fold that into Virgin as well, finally giving Virgin a regional feeder network?

If I was a betting man and Rex did fold or cease operations, then the fate of regional aviation in Australia will most likely be decided somewhere in the dark corners of the Qantas Chairmans Lounge in Canberra.

 

[HS-TQE]

Could Bain take a look at Rex if it falls into admin? Strip the Jet assets out and return to Virgin to solve their own aircraft and crew shortage, and then maybe get the government on the hook for a relaunched Saab 340 or other Dash 8/ATR regional operation, or alternatively fold that into Virgin as well, finally giving Virgin a regional feeder network?

If I was a betting man and Rex did fold or cease operations, then the fate of regional aviation in Australia will most likely be decided somewhere in the dark corners of the Qantas Chairmans Lounge in Canberra.

Can't see Bain getting involved considering they're busy with their own IPO preparations for VA, REX would be considered a 'distraction' for VA/Bain. Should REX file Voluntary Admin, the only things that VA would probably be interested in are the leases on the ex-SQ/MI and Jet Airways 737s that are at REX.

REX's older 737s (reported Hanger Queens in their final years at VA) are likely candidates for freighter conversion.

 

[jb747]

But… the whole benefit of having four operators is competition, and competition for pricing of subsidised regional services.

The tax payer benefits from this.

You're only going to get any level of competition as long as they are profitable. After that, you let someone else take the loss. They won't be there for long.

 

[RSVKanga]

then the fate of regional aviation in Australia will most likely be decided somewhere in the dark corners of the Qantas Chairmans Lounge in Canberra.

The fact is that the Rex regional stronghold of 2019 does not exist in 2024. The vast majority of regional destinations in this country are now also served by other airlines, most notably QF.

There are only 8 Rex monopoly markets at the moment, as QF has permanently encroached on a lot of once-Rex heartland in the past five years. Half of Rex's Saab fleet is not even being used.

Regional Australia will be just fine. As you said in your comment, the relevant state governments can reconfigure contracts for those destinations with other airlines, and lifeline routes will continue to be operated.

It's not like Rex is the only turboprop airline in Australia and exclusively serves 100 remote and regional destinations across the country. They're a small, increasingly irrelevant Singaporean-owned airline consisting of a very old fleet (half of which is parked), limited number of exclusive destinations and arrogant leadership that are able to strike the perfect balance between being crybabies and bullies.

 

[33kft]

Reminds me of a lot of the commentary by the general public around the time of Bonza's demise and how they wouldn't pay the ripoff airfares of QF/VA/JQ

ie the only profitable carriers with any chance of long-term success. All of these cheap fares by challengers are just a mirage unless they can be sustained for long enough that you don't end up a creditor instead of a passenger

 

[servicerequired]

See the posts above. We have four other airlines capable of flying to those regional destinations, and the government can just strike deals with them.

Rex regional of 2019 is not the Rex regional of 2024. There are now only 3 Rex monopoly destinations in NSW, for example. Parkes, Narrandera and Moruya. I’m sure that QF, Link, Alliance or Pelican will be happy to fly those routes if given the appropriate government support.

I would exclude Narrandera and Moruya, these are secondary routes to Griffith and Merimbula - Parkes is the next opportunity for QantasLink … it’s begging for a Q300 service.

 

[Aussie_flyer]

I would exclude Narrandera and Moruya, these are secondary routes to Griffith and Merimbula - Parkes is the next opportunity for QantasLink … it’s begging for a Q300 service.

The Q300s are all going

 

[RSVKanga]

I would exclude Narrandera and Moruya, these are secondary routes to Griffith and Merimbula - Parkes is the next opportunity for QantasLink … it’s begging for a Q300 service.

I think it’s important that all Rex monopoly destinations continue to have an air service if/when Rex collapses. QF’s Q300s are going to be retired, so unless Parkes can sustain a Q400 service, Link Airways’ Saab or FlyPelican might be better options for Parkes, Narrandera and Griffith. I think Qantas should take over a couple of Rex monopoly destinations in WA like Esperance and Albany.

 

[servicerequired]

The correct terminology re the DASH 8 200 and 300 fleet per the QF media release is ‘gradually phased out’ …

… grey area …

… it’s not as if the ZL demise is unexpected.

 

[servicerequired]

I think it’s important that all Rex monopoly destinations continue to have an air service if/when Rex collapses. QF’s Q300s are going to be retired, so unless Parkes can sustain a Q400 service, Link Airways’ Saab or FlyPelican might be better options for Parkes, Narrandera and Griffith. I think Qantas should take over a couple of Rex monopoly destinations in WA like Esperance and Albany.

You must not have a local understanding of either Narrandera or Moruya.

 

[Must...Fly!]

I think it’s important that all Rex monopoly destinations continue to have an air service if/when Rex collapses. QF’s Q300s are going to be retired, so unless Parkes can sustain a Q400 service, Link Airways’ Saab or FlyPelican might be better options for Parkes, Narrandera and Griffith. I think Qantas should take over a couple of Rex monopoly destinations in WA like Esperance and Albany.

In the short term that'll happen but I think Nexus might end up with those government contracts in WA

 

[ANstar]

There's probably two likely scenarios if Rex is truly having issues/

1. An overseas operator picks them up, Pionair and Skytrans having both been bought out recently in that manner. Rex also has a lot less liabilities for anyone in the market for an Australian jet AOC so anyone who took a look at Bonza could be a candidate.

It's very unlikely Rex will totally cease to exist, and likewise that the government would intervene.

This... I believe Vietjet was one of those interested in acquiring Bonza that walked away.. I wonder if Rex might be more interesting. Thier market cap nopw probably makes them an interesting takeover target for one of the carriers that expressed interest in Bonza.

 

[jrfsp]

I think it’s important that all Rex monopoly destinations continue to have an air service if/when Rex collapses. QF’s Q300s are going to be retired, so unless Parkes can sustain a Q400 service, Link Airways’ Saab or FlyPelican might be better options for Parkes, Narrandera and Griffith. I think Qantas should take over a couple of Rex monopoly destinations in WA like Esperance and Albany.

One of the benefits of the smaller Saabs into ALH and EPR has been an increase in schedule and subsequently pax numbers, the ability to do day return flights are key to the success of these routes. Previously these were flown by VA on the F50 at roughly half the number of flights.

the other issue for regional airports is the security screening for larger aircraft

 

[HS-TQE]

I'd suspect / tip "if" LKH wins the "leadership spill", whenever that may be, he'd close the Deloitte investigation down and it'll be "business as usual" with the red ink despite the financial failings being clearly stated.

Probably a good call to pad the current CEO and board with 'parachutes' in case, as well as calling in Deloitte to investigate the books for the current board to built their case against LKH.

 

[Saab34]

I'd suspect / tip "if" LKH wins the "leadership spill", whenever that may be, he'd close the Deloitte investigation down and it'll be "business as usual" with the red ink despite the financial failings being clearly stated.

Probably a good call to pad the current CEO and board with 'parachutes' in case, as well as calling in Deloitte to investigate the books for the current board to built their case against LKH.

So what will LKH do if he wins? Last time I checked he isn’t loaded himself to inject anything.

So I guess LKH would just continue as nothing occurred. What happens when the cash runs out? Rex are sort of lucky here that they do have a window, in which they have some funds (awaiting FY report for concrete numbers) in the bank to likely get them through for the moment. Waiting until the very end when nothing remains is very Bonza like.

 

[antycbr]

I'd suspect / tip "if" LKH wins the "leadership spill", whenever that may be, he'd close the Deloitte investigation down and it'll be "business as usual" with the red ink despite the financial failings being clearly stated.

Probably a good call to pad the current CEO and board with 'parachutes' in case, as well as calling in Deloitte to investigate the books for the current board to built their case against LKH.

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