REX to transition to ATRs, start domestic jet ops
Too many failed the space shuttle training program and never got over it, take out their frustrations on here instead of enjoying the greener pastures that are out there.
Interesting article about load factors with Rex’s apparent break even load factor 80%….
https://www.smh.com.au/business/comp...sYYRL10zQApANo
https://www.smh.com.au/business/comp...sYYRL10zQApANo
Qantas’ two brands can fly profitably with the fewest passengers on board, he estimated, with Jetstar needing to fill only 43 per cent of seats to break-even, and the red-tailed Qantas aircraft needing to fill 55 per cent.
In contrast, he estimated that Virgin’s break-even “load factor” was 76 per cent while Rex – which last year launched jet services between capital cities to compete directly with Qantas and Virgin - needs to fill 80 per cent of seats. Rex deputy chairman John Sharp said this estimate was “wrong by a wide margin” but would not provide the accurate figure.
In contrast, he estimated that Virgin’s break-even “load factor” was 76 per cent while Rex – which last year launched jet services between capital cities to compete directly with Qantas and Virgin - needs to fill 80 per cent of seats. Rex deputy chairman John Sharp said this estimate was “wrong by a wide margin” but would not provide the accurate figure.
I worked for a small startup once, and the managing director told me they didn’t even have a breakeven figure forecasted until at least 2 years in. Initially it’s all about raising awareness, bums on as many seats as possible, and low fares below the competition. The picture of where the place was going was much clearer at the 2 year mark, with all that volatility behind them.
I would assume Rex’ investor would want a 12-24 month disruption free period to see the potential of its investment. However I don’t think that’s going to be possible with Virgin ramping up further, with Jets arriving monthly for the next few years starting shortly. Then time wasters like Bonza on the side destroying margins in the leisure end.
I would assume Rex’ investor would want a 12-24 month disruption free period to see the potential of its investment. However I don’t think that’s going to be possible with Virgin ramping up further, with Jets arriving monthly for the next few years starting shortly. Then time wasters like Bonza on the side destroying margins in the leisure end.
Interesting article about load factors with Rex’s apparent break even load factor 80%….
https://www.smh.com.au/business/comp...sYYRL10zQApANo
https://www.smh.com.au/business/comp...sYYRL10zQApANo
- Ultimately if you are talking about break even points and load factors, there has to be an assumption on yield?
- The article seems to suggest that JQ (being a low cost carrier) needs to fill less seats that QF (the mainline full cost carrier). That seems to be a pretty basic contradiction in how LCC’s work
- Despite Virgin coming out of administration with significantly less debt, renegotiated EAs that resulted in lower cost bases for cabin crew, pilots, engineers and ground staff, and the renegotiation of commercial contracts including aircraft leases - the article suggests VA have to carry 34% more passengers than JQ and 21% more than QF.
Plenty in that article doesn’t stack up.
Has PAG invested more than 50m at this stage? 150m is the total amount they're willing to part with but in 50m increments. I cant find anything on the ASX to say they have shovelled more 50m to Rex.
In that case, Rex could very well be running a tight ship and still under the first 50m or, they’re subsidizing it via the turbo prop operation as PAG are unwilling to tip the next 50m. Last scenario the 73 is actually breaking even or making money.
There is not a snowflakes chance in hell that J* breaks even at 43%, unless they are acknowledging that QF pays for all their aircraft and equipment costs.
Prior to Covid J* was hovering around 86% LFs with 9% margins on that magical EBIT rubbish they use to prop up non performing businesses. "Oh we would be profitable, here look here's a number of how much profit we would have, had we not been in a loss...." If J* was indeed doubling its break-even numbers why are they not at 20%+ margins even domestic with lower average LFs has a higher margin throughout the same time at around 12%. Are they saying that while J* is extremely efficient in flight operations they are somehow squandering millions in profit to non operational matters?
Prior to Covid J* was hovering around 86% LFs with 9% margins on that magical EBIT rubbish they use to prop up non performing businesses. "Oh we would be profitable, here look here's a number of how much profit we would have, had we not been in a loss...." If J* was indeed doubling its break-even numbers why are they not at 20%+ margins even domestic with lower average LFs has a higher margin throughout the same time at around 12%. Are they saying that while J* is extremely efficient in flight operations they are somehow squandering millions in profit to non operational matters?
Last edited by 43Inches; 29th Jan 2022 at 21:55.
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In the midst of unprecedented flooding in the middle of South Australia, Rex are charging $590 for a YCPB to YPAD seat. Sure supply and demand etc but how is this not price gouging to the point illegality?
Regional Express: Our heart is deep in the wallet of a stranded country traveller.
Regional Express: Our heart is deep in the wallet of a stranded country traveller.
Their half-year report will be out in a couple of weeks. If their total draw down isn't up to $100 million I'd be surprised.
In the midst of unprecedented flooding in the middle of South Australia, Rex are charging $590 for a YCPB to YPAD seat. Sure supply and demand etc but how is this not price gouging to the point illegality?
Regional Express: Our heart is deep in the wallet of a stranded country traveller.
Regional Express: Our heart is deep in the wallet of a stranded country traveller.
Where is ACA with this story! They’re quick to vilify QF and do a 15 minute roasting on prime time.
Word on the street is that there has been some very high level crisis meetings involving John Sharp and senior Rex management because Mr Sharp has run out of people/companies to blame and is having trouble formulating a press release framing Qantas/Jetstar or Virgin…
There’s never been a better time to expand into the domestic market.
Last edited by MickG0105; 3rd Feb 2022 at 00:32. Reason: Grammar tidy up
In the midst of unprecedented flooding in the middle of South Australia, Rex are charging $590 for a YCPB to YPAD seat. Sure supply and demand etc but how is this not price gouging to the point illegality?
Regional Express: Our heart is deep in the wallet of a stranded country traveller.
Regional Express: Our heart is deep in the wallet of a stranded country traveller.
With EK doubling their weekly services from March in to SY and I’m sure QF, AA and many more will increase their services over the coming months. Has Sharpie done anything to get slot for the 73 to land in SY or will he have to land in CB or WLM and bus them the rest of the way
With EK doubling their weekly services from March in to SY and I’m sure QF, AA and many more will increase their services over the coming months. Has Sharpie done anything to get slot for the 73 to land in SY or will he have to land in CB or WLM and bus them the rest of the way
Genuine question: Are they retained by their original users and merely “on loan” to REX, or do the slot gods hand them out to the needy as required?
Again from what has been posted here, Rex has been making use of the international slots which are not currently being utilised (on a side note, it’s hard to imagine when all of those international slots will be used given the number of Chinese carriers that aren’t flying into Aus given China’s closed border).
I can’t actually find any reference to the above other than what people post here though 🤔
I thought the slots were allocated to airlines accordingly at a cost, those airlines pay for those slots regardless if you use it or not a bit like day care. I would think all domestic airlines will still be wanting theirs and paying as such. As said above the Chinese won’t be back for a while so if international is open and they still don’t use them not sure what would happen. I would hazard a guess those unused would remain for foreign or VA/QF and JQ to pay for and use internationally.
SY airport does not seem to have much info on how and who these prized slots are allocated to.
SY airport does not seem to have much info on how and who these prized slots are allocated to.