Australia's Rex In Turmoil, As Airline Halts Trading

I'm sure the kids fresh out of University at Deloitte will know just what to do to salvage this airline. Should be profitable in no time flat.

Delta will then soon be without a partner in Australia. Oh well.

Yup, bringing in Deloitte to run an airline should find fix everything soon.

I can tell them now for free: ditch the 737s and go back to operating a regional airline. They probably would have been better off using their funds to replace their ageing regional saab fleet.

They could of pursued a partnership with Virgin, who have disposed of their turboprops (unlike Qantas) and therefore unlikely to compete on any routes, using Virgin's jet service between major cities as a feeder for their regional planes. They could have even ditched their rubbish lounges in the cities too and used Virgin's as well to cut costs.

Really easy to just blame Qantas.

But both Qantas and Virgin have very frequent services on the 737 routes Rex targeted. They never could compete on frequency. And I doubt they could compete on price with Jetstar.

So that didn't leave them much of any competitive advantage.

We have too many upper-crust, Toorak and Woolstonecraft wankers in this country who come in once every decade with Daddy’s inheritance and try to set up a competitor to QF. They think that they’re the exception to the rule that Ben succinctly outlined in this article - Australia can BARELY support two mainline, full service carriers. QF is full-service, VA is quasi-full service, with Jetstar low-cost. All the others are regional, niche carriers that stick to their knitting and eke out a living; but God help any of them who think they will deviate from that course and not go down the road of Compass, Compass MKII, Impulse, Tiger Air, Bonza and now Rex. Australia is at once too big geographically, and far too small demographically to support any other model at all.

Fools and their money are soon parted.

"According to these reports, there are tensions among Rex Airlines’ directors, and a turnaround team is being appointed from Deloitte to save the airline from going under."

Aren't all Australian airlines already (down) under?

And, for those who don't know, Jetstar is a wholly owned subsidiary of Qantas. It goes to show you what a different environment that is. Remember Ted or the other attempts of US legacy carriers to set up a separate low-cost brand?

Rex's competitor is Virgin-Australia not Qantas, and Virgin has been assiduously lowering fares and undercutting Rex anytime that Rex has a competing flight.

As a frequent Rex flyer I find their 737 service impeccable, will be sorry to see them go.

Bonza failed because they threw huge capacity at marginal routes. Why would you operate a 737 Max 8 between Mildura (population 33K) and a secondary leisure port like the Sunshine Coast? That was just one example of their ridiculous route structure. The dodgy ownership also didn't help.

Rex is a different matter, and more about frequency. Business travelers on the highly lucrative "golden triangle" routes between Melbourne/Brisbane/Sydney/Canberra are accustomed to the high frequency services of QF & VA, so two nonstops a day in each direction between Melbourne and Brisbane, for instance, just doesn't cut it. The yields just aren't there.

Only share trading has stopped at this time, they're still flying.

Rex has been around since 2002, when a group of former Ansett employees purchased former subsidiaries Hazelton and Kendall Airlines from the liquidators after Ansett died in 2001. Both regional operators had been profitable before Ansett (and its blisteringly incompetent owners from Auckland) had taken them over. Rex went on to be a profitable operator until new Singaporean investors came up with the idea of running 737s on mainline routes. In hindsight it was a big mistake.

Deloitte is making a killing in reviving Australian airlines.
Isn't there a time when conflict of interest between their interventions comes into place?

VA has since moved downmarket after existing administration. They're largely a hybrid low-cost carrier (Y is entirely LCC with the base fare being carry-on only) with a 8-seater J cabin attached with limited domestic lounge services and a FF Program (Velocity).

Virgin is partnered with Link Airways and FlyPelican in NSW for regional services in those states, with both operators operating similar turbo-props, making a REX partnership less likely if at all.

Every time I have looked at REX flights on a sold-out route of QF or VA, I have been dismayed at the cost of a REX ticket. A LCC with second-rate slots, no decent lounge presence anywhere and no FF program should not even try to compete against the big hitters, and turns off potential new customers.
Stick to the routes the others ignore (plenty of them with potential) and don't go crazy with pricing and you may be in with a chance. Ditch the 737s; hope they are only leased...

I believe that when REX started with the jet service a few years back they were banking on Virgin going under, as Virgin was in administration then. It was a bet they took that has now gone pear shaped, partially due to Virgin surviving Administration.

And didn't an overbearing member of the management team mess up the overhaul arrangements for the CT7 turbines on the SAABs, leading to engineless airframes sitting around?

Yee of little faith, who poo-pooed my suggestion about Rex turning to Virgin partnership. Seems that Rex and Virgin are pursuing just that!

I actually like the Rex lounge at SYD. However, it is a Priority Pass lounge so one can use it with any airline flying out of Terminal 2.