Fair enough, buit VAi used this, yet it appeared travel agents overseas still knew little about it for whatever reason - maybe clients said 'book us on United', 'on Qantas' etc.
While there are a lot of things to do to expand Rex to a A320 or B737 operator flying the golden triangle,it isn't as ridiculous as it sounds, there are a few things also going for them, there is a massive pool of parked aircraft worldwide that leasors will want to get flying, lots of unemployed recent type air crew, jet fuel is still pretty cheap, money is cheap in this low interest rate environment, they already have ground agents and a relationship with owners and have staff at nearly every major Australian airport, they can't be allowed to go broke because they fly necessary regional routes....
Seeing as Bain are going to do a full overhaul of VA wih a fleet simplification and IT systems and customer facing web sites and Apps - why not piggy back off that work and join their booking systems to VA2s IT systems rather than duking it out in a head to head in a 3 way (no 4 way) capacity war in the golden triangle with QF, VA2 and JQ and Rex? Is this Rex's clumsy way of asking Bain to pick up the phone and talk to them?
In every disaster there is opportunity, I was a bit surprised to hear about serious thought about an ATR42 fleet - I thought the Saab 340s would be flying for many more years but I expect the sudden influx of cheap used/leased ATR42s might have been too good an opportunity to pass up.
As regards to service - pre-Covid-19 Rex had a single class of service with limited but free luggage allowance, ($5 extra leg room seats were the only option) and they served a cup of water and a packet of crisps/museli bar on all flights, which is pretty much the same pack of chips and muesli bar you get on any Y sercice on a VA or QF flight.,....
I agree it should be very feasible, shouldn't be hard, but some times when there are a multitude of simple things to do, it takes time and 8 months doesn't seem unduly pessimistic and maybe was conservative on their part.
I have flown with them a few times, not regularly, but had nothing really to complain about other than the price (but considering the alternatives - paid it). The flights were mostly under an hour.
In my books it was "what you see is what you get". They never cancelled on me, my flights weren't delayed, they never broke or lost a bag, etc never created any unreal expectations. They didn't promise anything that wasn't delivered,
While there are a lot of things to do to expand Rex to a A320 or B737 operator flying the golden triangle,it isn't as ridiculous as it sounds, there are a few things also going for them, there is a massive pool of parked aircraft worldwide that leasors will want to get flying, lots of unemployed recent type air crew, jet fuel is still pretty cheap, money is cheap in this low interest rate environment, they already have ground agents and a relationship with owners and have staff at nearly every major Australian airport, they can't be allowed to go broke because they fly necessary regional routes....
In every disaster there is opportunity, I was a bit surprised to hear about serious thought about an ATR42 fleet - I thought the Saab 340s would be flying for many more years but I expect the sudden influx of cheap used/leased ATR42s might have been too good an opportunity to pass up.
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Remind me, why are we talking Rex's plan again? I thought it was a thought bubble that was by and largely dismissed as pie in the sky thinking whilst VA was still in the air (either during administration or as VA2).
Remind me, why are we talking Rex's plan again? I thought it was a thought bubble that was by and largely dismissed as pie in the sky thinking whilst VA was still in the air (either during administration or as VA2).
Isn't 4 Corners pre-recorded? If an ASX announcement was only made today, how could anyone representing VAd comment (unless about the original 'thought bubble?'
Isn't 4 Corners pre-recorded? If an ASX announcement was only made today, how could anyone representing VAd comment (unless about the original 'thought bubble?'
Don't know why I missed that one. But it seems to me that Rex made an announcement to avoid getting into trouble again with the ASX, perhaps with knowledge that Four Corners would be discussing it.
Don't know why I missed that one. But it seems to me that Rex made an announcement to avoid getting into trouble again with the ASX, perhaps with knowledge that Four Corners would be discussing it.
In which case the announcement could/would simply have said ‘we’re continuing to explore the possibilities’ rather than being so definitive and specific. Note it nudged the share price up around 17% yesterday
Well, I’m no businessman, but I have to wonder at the logic. The domestic market is unlikely to be any larger than about 50% of it’s size in 2019. So, between Virgin, Jetstar, and QF, they’ll have enough capacity for over double the actual market. So, it wouldn’t be much different to engaging in a capacity war. It probably made some sense if Virgin actually went under, but if it survives, all I see is Rex folding.
Rex won't fold, because remember that Rex flies to governments subsidised destinations not serviced by other airlines. Their income is underwritten by Commonwealth and state governments. Unless they ruin their finances themselves like JB.
I'm not familiar with airline deals, but looking at the press release with no airline background, you can see that they are palming off a lot of their risks to ATR.
I'm not familiar with airline deals, but looking at the press release with no airline background, you can see that they are palming off a lot of their risks to ATR.
Yeah - I had assumed that the idea was for AIrbus/Leonardo to pay for and build the training facilities and give Rex an excellent deal on leasing/owning ATRs, I expect ATR are up to their necks in excess aircraft and probably are looking for a partner to give them a training and sales prescence in Australia and Oceania to give them economy of scale so for them Rex might be a decent partner. Makes it easier for ATR to get a foothold and maintenence economy of scale in the SE Asia/South Pacific market with a big customer like Rex along with Air New Zealand
I think we will see more of this in the industry with co-operation between the manufacturers and airlines because without an airline industry/customers the aircraft manufacturing industry is a lot of jobs and votes in the USA and the EU that will disappear if aircraft manufacturing stops. Another thing we could see is the manufacturers introduce very attractive trade-in and aircraft return schemes to physically destroy current generation aircraft to get rid of the capacity overhang from thousands of aircraft parked in the desert and in storage, so a high fuel price aren't going to get airlines ordering and taking deliveries of new aircraft, they are going to have to incentivize or financialize air frame destruction/scrapping to get all these older but still perfectly servicable airframes out of the market and unwanted and un-needed new A320neos, B737-Maxs delivered.. All complicated by US/EU trade wars as well. Boeing and Airbus are "too big to fail" for their respective governments so expect endless money printing and government loans to bail them out and keep their ability to manufacture current because once you lose a production line or an entire manufacturer (say Boeing went broke tomorrow) then you have an aircraft manufacturing monopoly rather than a duopoly.
I think the inability to switch off new aircraft supply, and the massive amount of aircraft in the used market and parked/idle aircraft in the system made worse by Covid-19 effects on airlines and the 737-Max issue will send aircraft leassors to the wall and will decimate valuations of aircraft to the point where the airline business won't be as capital intensive as it used to be. Which in the long run will be good for the industry because this massive capital intensive barrier to entry will be removed so might prompt a future worldwide renaissance in airline growth and different business models tried out.
As others have said - whatever VA said about Rex's plans would refer back to their first "thought bubble" as 4 Corners is prerecorded.
Rex won't fold, because remember that Rex flies to governments subsidised destinations not serviced by other airlines. Their income is underwritten by Commonwealth and state governments. Unless they ruin their finances themselves like JB.
Perhaps a better way to phrase that is: "The current business model of Rex (flying Saab 340s to many regional destinations) won't fail because its failure would be politically unacceptable to many state and federal governments."
If Rex get bigger, get Jets and compete with QF JQ and VA2 in some future capacity war then the politics of regional services and who is and isn't "foreign owned" start to get really interesting!
I don't think Rex would do that, unless it's led by someone really stupid.
Rex flies SAAB carting fewer passengers than a timetabled bus in Sydney. QF VA DJ is not going to fly those planes and go into the pain of servicing them. Rex crafted out a niche market which works well and don't need too much brain power on a day to day basis, why would them join into the fight with those 2 when they could just sit there and eat pop corn?
Rex won't fold, because remember that Rex flies to governments subsidised destinations not serviced by other airlines. Their income is underwritten by Commonwealth and state governments.
In the current state (post COVID), yes you a right.
But if you are talking about the subsidies that Rex received prior to the onset of COVID-19, there weren't actually very many subsidised routes, particulary looking at overall flight frequency. To the best of my knowledge, there are several types of routes (I could be wrong on #1- I assume they are subsidised)
1) Subsidised services (eg Queensland outback routes)
2) Regulated services which Rex has exclusive rights to fly (eg. ex PER routes, SYD-MIM etc)
3) Non regulated services which Rex is the sole operator (eg. MEL-WGA, SYD-LSY, MEL-MIM etc)*
4) Competitive routes (eg SYD-WGA, MEL-MQL etc )
* all of Rex's interstate routes fall in this category, which means all of their MEL routes are unsubsidised by state governments.
I think looking at frequencies, #3 and #4 made up the vast majority of their services. And even on #1 and #2 there have been failed operators in the past, who haven't succeeded in spite of subsidies or regulation.
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) vs ‘food (
) with every fare’ (VA1)
