Rex takes fight to Qantas and Virgin [Jets for REX?]

[David Knudsen]

Full article: AFR Website or similar on SMH

Regional Express Holdings will capitalise on the turmoil from Virgin Australia’s collapse and invest $200 million launching capital city services to compete with Qantas, Jetstar and Virgin Mark II.

In a move that could harm the sale price achieved by Virgin’s administrators, the regional airline operator is working on a business plan that includes leasing 10 narrow-bodied jets as well as employing new pilots, cabin crew and ground staff.

[MarkR]

Last time I checked they had something like $9m in cash, their model works on low cost old planes, I don’t think it will fly. Just reading the AA article looks like $200m capital is looking to be raised within 3 weeks.

[Greg Hyde]

Remember, Kendell (REX's predecessor) attempted to move from props to jets in the 1990's with the introduction of the CRJ200. It didn't go well.

[Kent Broadhead]

Originally Posted by Greg Hyde

Remember, Kendell (REX's predecessor) attempted to move from props to jets in the 1990's with the introduction of the CRJ200. It didn't go well.

It was wholly owned by Ansett at that stage wasn't it, and allocated to do the Canberra shuttle (from Sydney at least). My wife always asked me to let her know which flights would be CRJ - she far preferred them over the S340 alternate.

[Greg Hyde]

Yes Kent,

An Ansett subsidiary that went belly-up with Ansett.

Word has it, that the CRJ jets where expensive to operate.

[MarkR]

I dont think CRJs or even EMBs are in the picture, more likely A320/737 with a ready workforce on tap locally, smacks of Compass MK3 or Impulse V2.0

[Garry Emanuel]

It would make some sense for this to be happening if REX had a strong balance sheet coupled with a mindset of a challenger/disrupter.

Whilst I am not familiar with the management, ownership nor culture, my interactions in recent years have felt like they were with a very staid, conservative "brown suit" style of business.

No doubt there will be turmoil in the weeks and months ahead as Qantas, perhaps a trimmed-down Virgin and now potentially REX all scramble to get their hands on a smaller number of passengers.

I can see the $200 million and the current surplus $9 million evaporating quite quickly.

[Greg Hyde]

REX has signed a MOU with ATR to investigate replacing SAABs with ATR 42/72 aircraft

[Erik H. Bakke]

ATRs would require a bit more runway, wouldn't they, so I can't see them completely migrating.

Or maybe I have the wrong impression of a lot of the airports they'd be flying into out west. Happy to be corrected, as it would save me the cost of an airfare to see for myself

[MarkR]

Originally Posted by Erik H. Bakke

ATRs would require a bit more runway, wouldn't they, so I can't see them completely migrating.

Or maybe I have the wrong impression of a lot of the airports they'd be flying into out west. Happy to be corrected, as it would save me the cost of an airfare to see for myself

Not much difference, the SAABs are not great performers when it comes to runway length, they require 25% more balanced field length compared to most medium size turboprops which puts them closer to the bigger ATRs

SAAB 340b at MTOW in ISA needs 1285m TORA
ATR72-600 at max PAX and a 300nm leg needs 1175m TORA under ISA conditions