Rex in voluntary administration, ending all 737 services

[Mwenenzi]

I believe Rex owns the rest of their aircraft, just not the 737's, and given that'll likely never come back (at least the near term), that won't be an issue.

But that does mean they are 100% paid for and clear of debt. May have financial debit instrument pledged against the asset.
Just like to the so called 2 off B777 that VA1.0 "owned". They were reclaimed by bank that had loaned money based on asset. As VA annual report notes and CASA govt records.

REX Airlines Fleet Details and History

REX Airlines (IATA: ZL / ICAO: RXA) is an airline from Australia founded in 2002 currently operating a fleet of 57 aircraft with an average age of 30.4 years

www.planespotters.net

A lot of parked Saab 340's. Some for years. Worth the value of aluminium scrap metal and engines (if not hours expired)???
Aircraft financing is tax driven financial engineering.
VH-REX REX

<snip>
Registration holder
Registration holder: AIRCRAFT LEASING VII LIMITED
Registration holder commencement date: 15 March 2021
Address 1: 15 Sackville St
Suburb / City: LONDON
State / Territory: LONDON
Postcode: W1S 2DJ
Country: United Kingdom
<snip>

 

[Saab34]

I wonder if we will see Bonza like repossessions here? That actually occurred before it officially started the administration process.

 

[Mwenenzi]

I wonder if we will see Bonza like repossessions here? That actually occurred before it officially started the administration process.

Will depend if they have kept up with payments

Fuel companies can be hard line and only supply if paid in full at the time ~no credit.
Do read about 3rd world airlines paying for fuel in hard cash US$.

 

[MEL_Traveller]

Will depend if they have kept up with payments

Fuel companies can be hard line and only supply if paid in full at the time ~no credit.
Do read about 3rd world airlines paying for fuel in hard cash US$.

agree. If there hasn’t been any default in payments, i can’t see how a lessor can take possession. You’d potentially be depriving the lessee of using the asset to earn money.

 

[3018]

According to Flightradar24, RXA/ZL 738 flights are still going. Many have been delayed a lot today (fog in Melbourne for one)... and just saw ZL142 left Melbourne on time for Sydney. So, they're still getting out so far.

But who knows what'll happen after the board meeting this evening...?

On another note, where are the ZL 738 crew based? Sydney?

 

[Saab34]

On another note, where are the ZL 738 crew based? Sydney?

MEL/SYD/BNE.
I understand Adelaide overnights a crew nightly from Melbourne.

 

[HS-TQE]

But that does mean they are 100% paid for and clear of debt. Many have financial debit instrument pledged against the asset.
Just like to the so called 2 off B777 that VA1.0 "owned". They were reclaimed by bank that had loaned money based on asset.

Don't think REX has any 'assets' of value that are encumbered/mortaged like VA 1.0 had with their 777-300ER and virtually all of their "owned" 737-800 fleet.

I'd suspect the SAABs are not encumbered and had their value written down to "zero" as they weren't able to be mortgaged (if at all). Open to correction on REX's circumstances with the SAABs.

 

[OATEK]

Shall we save this here for now:
View attachment 399671

Quite a different picture to when ZL (Hazelton) used to be based out of Cudal!

 

[Mwenenzi]

Don't think REX has any 'assets' of value that are encumbered/mortaged like VA 1.0 had with their 777-300ER and virtually all of their "owned" 737-800 fleet.

I'd suspect the SAABs are not encumbered and had their value written down to "zero" as they weren't able to be mortgaged (if at all). Open to correction on REX's circumstances with the SAABs.

From half year report HY_FY2324.pdf

<snip>
Fleet Changes
In July 2023, Rex signed leases for two Boeing 737s. The aircraft subsequently arrived on 28 July 2023, Rex’s eighth Boeing 737 bearing
registration VH-8KH. The ninth Boeing 737, VH-8JS arrived on 22 September 2023.
Rex’s domestic jet flet reached double fiures on 13 December 2023 with the airline taking delivery of its tenth Boeing 737 after signing a
Letter of Intent (LOI) to lease in October. The aircraft, VH-8ZL, arrived in Brisbane from Goodyear, Arizona, and entered service in time for
the busy holiday season.
<snip>

The lessor's will looking the current situation with great interest.

 

[yachty]

agree. If there hasn’t been any default in payments, i can’t see how a lessor can take possession. You’d potentially be depriving the lessee of using the asset to earn money.

The lessor can repossess the aircraft if insolvency is perceived to be imminent, the lessee doesn't necessarily need to be in arrears.

According to Flightradar24, RXA/ZL 738 flights are still going. Many have been delayed a lot today (fog in Melbourne for one)... and just saw ZL142 left Melbourne on time for Sydney. So, they're still getting out so far.

But who knows what'll happen after the board meeting this evening...?

Nothing cancelled tomorrow or the day after yet for the jets but I guess if administrators are appointed tomorrow, as reported, then they will be cancelled quickly...

 

[RSVKanga]

There is absolutely no argument as to why the government should bail out Rex, and the people who want Rex saved are quite desperate to the point where they’re resorting to misinformation and fake news to argue, such as in the following quote from a so called “senior UTS lecturer” in this ABC article

Senior lecturer in tourism from the University of Technology Sydney, David Beirman, said the potential loss of Rex would be significant due to the number of regional communities it served.

"If you look at very substantial regional centres like Mildura, Broken Hill, Merimbula, in quite a lot of places, it's actually the only carrier that operates flights between the capital cities and those towns," he said.

"So, it’s influence as a regional carrier is actually very, very important.
Dr Beirman said he hoped the government would step in to help the airline.

"My particular hope, and I'm sure it's probably the same hope for the board of Rex, is that maybe government may come to offer a loan or some sort of arrangement whereby Rex can actually extricate itself from its problems," he said.

Mildura, Broken Hill and Merimbula are Qantas destinations as well. They have been served by QF for quite some time.


It’s a shame that this misinformation/fake news quote from this person is published in the ABC, which is usually the most credible and unbiased news outlet in this country. I hope they remove that section of the article. It’s also a reminder for all of us to be wary as the fire intensifies.

 

[henrus]

There is absolutely no argument as to why the government should bail out Rex

Proportionally per number of staff and number of seats, Rex got significantly more in hand outs from the gov than Qantas did. I agree that they shouldn’t get a hand out due to a failed experiment.

 

[Saab34]

In the time like this I find the two best sources for information are the AFR and Australian. They do skew more opinion, but sometimes it’s these opinion pieces that shines the light, ie Joe Aston.

 

[Mattg]

Very sad for the crew. I’m *hoping* for their sake that even if not on active flying duty, they’ll at least get paid for the next while as things are sorted out. Other parts of the business are profitable.

I did my bit to support poor Rex. Or the crew at least! Got to diamond in just under three months!

I wonder how many Diamond members there are at this point? I can't imagine it would be more than a handful.

I was in Rex's ADL lounge yesterday and it was empty, despite there being four flights (two of them jets) leaving within the following two hours.

There is absolutely no argument as to why the government should bail out Rex, and the people who want Rex saved are quite desperate that they’re resorting to misinformation and fake news, such as in the following quote from a so called “senior UTS lecturer” in this ABC article



Mildura, Broken Hill and Merimbula are Qantas destinations as well. They have been served by QF for quite some time.


It’s a shame that this misinformation/fake news quote from this person is published in the ABC, which is usually the most credible and unbiased news outlet in this country. I hope they remove that section of the article. It’s also a reminder for all of us to be wary as the fire intensifies.

Rex does serve other major cities from towns like those with direct services that Qantas does not have (e.g. ADL-BHQ or MEL-MIM).

 

[jrfsp]

There is absolutely no argument as to why the government should bail out Rex, and the people who want Rex saved are quite desperate that they’re resorting to misinformation and fake news, such as in the following quote from a so called “senior UTS lecturer” in this ABC article



Mildura, Broken Hill and Merimbula are Qantas destinations as well. They have been served by QF for quite some time.


It’s a shame that this misinformation/fake news quote from this person is published in the ABC, which is usually the most credible and unbiased news outlet in this country. I hope they remove that section of the article. It’s also a reminder for all of us to be wary as the fire intensifies.

I think you are misinterpreting the premise of the article, with Broken Hill and Merimbula, Rex flies to multiple state capitals (SYD/MEL) being the only operator on one of those pairs. "In a lot of places" wasnt specifically refencing those towns regarding being the sole operator as far as my interpretation goes.

 

[Ansett Nostalgic]

There is absolutely no argument as to why the government should bail out Rex, and the people who want Rex saved are quite desperate that they’re resorting to misinformation and fake news, such as in the following quote from a so called “senior UTS lecturer” in this ABC article



Mildura, Broken Hill and Merimbula are Qantas destinations as well. They have been served by QF for quite some time.


It’s a shame that this misinformation/fake news quote from this person is published in the ABC, which is usually the most credible and unbiased news outlet in this country. I hope they remove that section of the article. It’s also a reminder for all of us to be wary as the fire intensifies.

With <redacted> statements like that it just confirms that RSVKanga really is a parody account. ABC has been a laughing stock for years now because it spouts <redacted>, which is why so few Aussies bother to watch it anymore.

I will miss Rex 737 capital city services though. The best J meal I have had on a domestic flight was with Rex - friendly, warm, honest catering and service that captured the true spirit of Australia based on the country values that Rex wanted to promote.

 

[drron]

I find it quite amusing that some people think that QR should be refused extra capacity as they would use it to damage QF.
But when QF uses extra capacity to crush ZL well that’s a good thing.
Remember up thread what happened when QF entered the Albury market. Ended up with ZL cancelling their 3 flights a day to MEL to be now just 1 QF flight a day to MEL in the early morning and I back at night.
So not nearly as good for the citizens of Albury. And also not as good for the people flying into Albury to work such as medical specialists from MEL teaching hospitals to do a days clinic there. Not possible with the service QF provides.So many now have to fly to MEL to see their specialist.

Many city folk have no idea what the services that ZL offered meant to country folk.

 

[MEL_Traveller]

The lessor can repossess the aircraft if insolvency is perceived to be imminent, the lessee doesn't necessarily need to be in arrears.


Nothing cancelled tomorrow or the day after yet for the jets but I guess if administrators are appointed tomorrow, as reported, then they will be cancelled quickly...

There must need to be some ‘default’ event in the contract, or under applicable law for this to happen? I dunno how the lessor would necessarily establish ‘potential’ insolvency to the degree of certainty required to avoid breach of contract.

 

[RSVKanga]

Remember up thread what happened when QF entered the Albury market. Ended up with ZL cancelling their 3 flights a day to MEL to be now just 1 QF flight a day to MEL in the early morning and I back at night.
So not nearly as good for the citizens of Albury.

Actually, Albury citizens are reaping the benefits.

When ZL dominated Albury, it was 3 flights a day to MEL on an ageing Saab 340.

Now, not only does Albury get QF flights to Sydney and Melbourne, truly connecting it with oneworld and the world, they also get QF jet service from Brisbane. In fact, Albury is the only airport in inland NSW to get jet service.

I find it quite amusing that some people think that QR should be refused extra capacity as they would use it to damage QF.
But when QF uses extra capacity to crush ZL well that’s a good thing.

Australia’s domestic aviation industry is a free market, unlike international aviation. Welcome to capitalism.

 

[Saab34]

The loads this evening are just so so bad.

Many flights are only in the 20s and 30s. Have a look at some of these up in the air right now. It really paints a picture on why this failed. 5pm peak, and the flights are running at a few dozen bodies on board. The whole model is based on being busy during these times.