Rex to fly between Australian capital cities

[p--and--t]

Funny old business, the airline business. REX have been seeking Government assistance as they were going bad and had a lot of nasty old competition from the big red guy and could not compete. I have not flown with them since Qantaslink introduced the Port Lincoln service as their customer service was unbelievably bad but we had no option but to suck it up. Just hope this mob do not get into the major routes but if they do then they will fail.

Agree, best they stick to their knitting where they have had success (albeit at the expense of country citizens). They should perhaps have a look back at VA's journey for lessons.

 

[dajop]

Have you flown in one? It's a huge step back in time, in fact a step back 20 years ago and they've not spent a cent on refurbishing the insides by the looks. They are pretty dire.

If you don't like it you can always drive. Such is the life of a monopolist!

I think one thing that's going to change post COVID is that people are going to just have to get used to aspects of air travel that aren't "shiny and new". It is pretty obvious that airlines struggle to return a profit at the best of times, and thus can't withstand any sort of shock. There is a lot of criticism about dated looking cabins, dated lounge decor, dated airports etc. But realistically airlines just don't have the wherewithall to be refreshing things all the time. Rex's planes have a specific mission, and the most amount of time people spend on them is around 2 hrs, perhaps a bit longer for the QLD hops.

Interestingly, have a look at "FlyCorporate" another east coast regional player .... they fly Saab's + Metroliners. Airnorth's small prop fleet of EMB-120's has an average age also of about 17 years. By contrast Jetgo had newer regional jets, and well they went bankrupt well before their planes got old.

 

[flydoc]

Well some ASX investors are on board with the proposal. REX came out of a belated trading halt this morning after making a promising statement to the market in response to the media commentary and shares spiked almost 50%, now holding 30% up on previous close

 

[stoney]

Flydoc, If you are a day trader and got the gonads than have fun but for the serious investor, just a matter of time to make a small fortune. First start with a big fortune.

 

[eastwest101]

This might be a business opportunity for Rex, by maintaining their Saab 340 services to regional destinations and then expanding interstate domestic they are essentially filling the "too important to fail" category, because of their political connections and footprint, they will not be allowed to fail because if they did then every regional health service would grind to a halt, and state public servants and politicians would be unable to deliver any services or visit the remote parts of every state. As a matter of fact - by going domestic as well as regional Rex will be the natural provider of air services for every state government in Australia, again, making it "too important to fail". As long as people west of the Great Divide vote, they will require some services that only a regional airline like Rex can provide and any government that allows Rex to vanish, can expect to disappear themselves at the next election.....

You only had to see how quickly the federal and state governments jumped to Rex's assistance during the Covid-19 crisis to see how electorally important they are. That's why I guarantee that security screening for aircraft of less than 40 seats either, will never happen, or it will happen with the screening paid for by state/federal governments not Rex/Qantas link passengers or the local government airport owners despite what CASA or other security agencies say.

 

[jb747]

If you were someone who potentially wanted an airline in Oz, then you could purchase VA. It has the big positive of being a going concern, it has aircraft, staff and expertise. It also comes with $7 billion dollars of debt.

If you were to buy Rex, it comes without debt. It lacks aircraft and staff. But it does come with an AOC. That is what you need to start building your airline. I guess the upshot is that it might be cheaper for any prospective new starter to build on Rex, whilst letting Virgin die, and picking up the staff from the carcass.

 

[dajop]

It lacks aircraft and staff.

Normally that's a huge problem, but now, I think not so much (assuming VA doesn't return, which is a reasonable assumption when discussing Rex taking on capital city routes - I doubt they would do that if VA2 emerges).

In addition to AOC, what Rex brings is operations in the 5 busiest airports in Australia already and relationship with the airport operator (for better or for worse ) as well as an understanding of the Australian aviation scene. They also have a discipline that sees them regularly exit routes that they don't make money on, and do compete with QF - on 5 routes anyway, and know when they can't compete with QF and thus pull out.

What they lack is a compelling loyalty marketing program, and that may be a necessary evil to compete with QF more broadly than 5 routes.

 

[Quickstatus]

Have you flown in one? It's a huge step back in time, in fact a step back 20 years ago and they've not spent a cent on refurbishing the insides by the looks. They are pretty dire.

Yes I have flown in them many times between SYD-WGA.

Gets me from A-B. Good flights. No frills.
I’m not sure what step back in time means.
It has a better record than a next gen aircraft of note.

 

[Quickstatus]

In addition to AOC, what Rex brings is

History of disciplined and profitable operations for longer than either of the 2 majors.

Though going from 34 seat operations to jets is not easy with QF well versed in crushing competitors in the past.

Very logical for Rex to play spoiler.

 

[Quickstatus]

they will require some services that only a regional airline like Rex can provide

ZL has the perfect aircraft for the regional routes it operates. And its almost a monopoly.

 

[cove]

We have been Rex shareholders from the start as they support our country folks. Having everyone move to a major city does not work well.

 

[samh004]

I'm not sure this will happen, but I'd like to see them give it a shot. Just think, from the administration of VA we could end up with an Indigo-based true LCC and a mid-service Rex operating on the same routes as Qantas, Jetstar and whatever survives VA. Although... I'm not sure how that would particularly help a refreshed VA... more competition!

 

[AviatorInsight]

This will be very interesting to watch.

They don't have the jets....yet.
They don't have the pilots.
They don't have a high capacity AOC.
They don't have a proposed check and training system.
They don't have simulators.
They don't have operations manuals for the proposed operation.
They don't have nor applied for airport slots.
They don't have ground equipment to support the jets nor agreements with companies that do.
They have not developed emergency procedures and completed EP demonstrations to the regulator.

All to be done with a March 2021 kick off? Good luck to them. Maybe they'll get Alliance to do some flying?

Time will tell.

 

[oz_mark]

This will be very interesting to watch.

They don't have the jets....yet.
They don't have the pilots.
They don't have a high capacity AOC.
They don't have a proposed check and training system.
They don't have simulators.
They don't have operations manuals for the proposed operation.
They don't have nor applied for airport slots.
They don't have ground equipment to support the jets not agreements with companies that do.
They have not developed emergency procedures and completed EP demonstrations to the regulator.

All to be done with a March 2021 kick off? Good luck to them. Maybe they'll get Alliance to do some flying?

Time will tell.

I think much will be decided based on what happens with VA. As for timing, they do have some good connections, and I think they can manage CASA (especially if VA falls over).

 

[dajop]

All to be done with a March 2021 kick off? Good luck to them. Maybe they'll get Alliance to do some flying?
/QUOTE]

Good points. How long did Virgin Blue take to start? I saw some reports that Virgin Blue was established in November 1999 and made their first flight in August 2000. That's just 9 months. If Rex board decides by mid July, then March 2021 is 7.5 months away. If VA collapse completely, there will be a lot of expertise to tap into to help this along the way. IMHO, this is really dependant on whether VA is liquidated (and if it is, our sympathies) or continues to fly with a new investor.

 

[dajop]

All to be done with a March 2021 kick off? Good luck to them. Maybe they'll get Alliance to do some flying?

They are planning to have a decision by mid July, that leaves about 7.5 months. It will be interesting. How long did Virgin Blue take to commence operations? I could find information that suggested they were established in Nov 1999, which meant 9 months before they started flying in Aug 2000.

IMHO, this all depends on what happens with VA. If VA are liquidated, which I hope they are not, I imagine there will be plenty of expertise available for hire to support Rex getting the required staff, AOC etc, in place.

 

[theblank]

Perhaps REX should utilise this $200m by upgrading their current fleet offering.

Why would it be a good idea to do that, when they are already trading successfully with what they have.

 

[AviatorInsight]

I think much will be decided based on what happens with VA. As for timing, they do have some good connections, and I think they can manage CASA (especially if VA falls over).

They are planning to have a decision by mid July, that leaves about 7.5 months. It will be interesting. How long did Virgin Blue take to commence operations? I could find information that suggested they were established in Nov 1999, which meant 9 months before they started flying in Aug 2000.

IMHO, this all depends on what happens with VA. If VA are liquidated, which I hope they are not, I imagine there will be plenty of expertise available for hire to support Rex getting the required staff, AOC etc, in place.

I have a feeling that that's what they are waiting for also. Mid July is the date that Virgin will be looking to close the deal with the new buyers (if it happens), coincidence?

No doubt though that if VA gets liquidated it'll be much easier for them take quite a few of us on board (and in some cases head back there) with all of our manuals and procedures in tow for a quick launch.

 

[OATEK]

I agree I wouldn't fly in those old Saab tin cans if you paid me. By the time they retire them, they will have been flying for 35 years. They can't even keep the propellors in-tact. I'll pass flying on anything run by Rex.

Have you flown in one? It's a huge step back in time, in fact a step back 20 years ago and they've not spent a cent on refurbishing the insides by the looks. They are pretty dire.

The SAABs were such a step up from the De Haviland Shortz that used to fly around NSW. While it is abut 3 years since I last stepped aboard a Rex SAAB, it wouldn't worry me hugely if they were the only option to a key destination.

 

[cambriamarsh]

The SAABs were such a step up from the De Haviland Shortz that used to fly around NSW. While it is abut 3 years since I last stepped aboard a Rex SAAB, it wouldn't worry me hugely if they were the only option to a key destination.

What is a DH Shortz? Google couldn't tell me?