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REX - REGIONAL EXPRESS HOLDINGS LIMITED


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Been having a look at REX. Made around a $10m profit last FY. Fuel costs were $38m and carbon tax on fuel was $2.5m (not sure if it is included in the first figure). A 40% reduction in fuel costs saves them around $15m pa.

 

Has seen some share price improvement but nothing like QAN who certainly has been a far worse performer over the last couple of years.

 

With oil in a steep bear market it certainly makes REX one of the beneficiaries - http://www.bbc.com/news/business-30687669.

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  • 5 years later...
Regional Express (Rex) has today signed a Commonwealth Grant Agreement under the COVID-19 Regional Airline Network Support program announced by Deputy Prime Minister, the Hon Michael McCormack, on 28 March 2020. Under the program, regional airline carriers will be provided assistance to maintain a minimal weekly schedule to regional and remote ports. The RANS program will provide funding for up to six months with an initial approval for six weeks.

 

Under the Grant Agreement, Rex will receive funding to operate 1-2 return services a week to most destinations on the Rex network.

 

If you look at the announcement, of the 76 service requests, some 38 were approved.

 

WA (services regulated by state govt) gets one flight a week ex-Perth to Albany, Esperance and Carnarvon.

Qld (services regulated by state govt) gets a mix, but all One flight a week on Northern routes ex Cairns and Townsville, as well as ex-Brisbane. Most are multi-stop routes out west.

Qld (unregulated): one a week Townsville-Cairns, Cairns-Mt Isa, Cairns-Bamaga

SA (unregulated) get most services, one flight a week; Pt Lincoln, Mt Gambier, Broken Hill, Ceduna, Whyalla, Kangaroo Is.

Vic (unregulated) get all services, 1-2 flights a week: Mildura, King Is/ Burnie, Albury/ Wagga, Merimbula

NSW (unregulated): 1-2 a week to most places, Cooma, Moruya/Merimbula, Broken Hill/Dubbo, Orange, Bathurst/Parkes, Grafton/Lismore, Wagga, Albury, Griffiths/Narrandera,

 

(Glaring exception Armidale .... tough luck Barnaby ?)

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When we get back to normal or near normal regional travel, which could be just weeks away, REX could rocket to stardom.

$1 is within reach even before then but afterwards, with Virgin grounded, pre-crash levels are not beyond the realms of possibility.

This I Believe, as Eric Baume used to say (You have to be past your Best Before date to remember him).

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  • 3 weeks later...

An interesting announcement from REX that it is expanding into becoming a domestic carrier, as distinct fro its regional routes.

From THE OZ

 

Regional airline Regional Express says it could be operating its own domestic services by March next year.

 

In a statement released to the market on Wednesday, Rex said it was exploring the feasibility of its own domestic services in the wake of Virginâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s collapse, saying it would require equity funding of around $200m.

 

Rex said it was talking to several parties about backing a $200m capital raising to support a capital city expansion plan set to take shape over the next two months.

 

The airline said it was seeking to have a high capacity qualification added to its air operators certificate to support the plan, which would reportedly involve leasing 10 narrow-bodied jets to add to its existing turboprop fleet.

 

Investors welcomed the news sending the airlineâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s shares up almost 30 per cent to $1.16 after tehy resumed trading following a halt called on Tuesday.

 

 

This makes sense for many reasons.

Firstly, its fleet of aging SAAb 34's will need replacement. Its average fleet age is around 24 years, and the aircraft are longer being made. The older 34's could be eased out and gradually replace by regional jets.

Secondly, it gives a better career path fro its pilots to go from turbine to jets. They may see less cannablising of their staff to larger airlines.

Thirdly, there are legions of unused jets everywhere that could be leased for a pittance, so no great capital outlays.

Fourthly, there are legions of crews to fly and maintain these jets.

Fiftly, it sends a message to QANTAS and VA, that they will have more compettion.

Sixthly, the potential buyers of VA will start thinking that VA may not be such a good deal ( would be good for QF and REX if VA never returned). and as corrollary to that, if VA were cheap enough, REX Singapore owners would be able to get in a lowballbid for the entire airline.

And finally, John Sharp their chairman has very close links with the government, and seems to be able to squeeze funding for refional areas that benefit REX greatly.

Mick

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And I should have added to the list below, that fuel is the cheapest its been for a long time, and like;ly to stay that way for the forseeable future.

Plus the owners of the bvig airports are not likely to require a mortgage on fort knox to obtain a slot at the airport, nor charge high fees for seices such as parking.

And theres probably a few more I haven't even thought of.

Mick

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  • 3 months later...

It keeps teasing us with small sp rises, as per current market.

A few months ago I think most people were fairly confident this was just another flu epidemic and would be over soon. But the present consensus seems more gloomy than that.

It seems to me though that the real problem for airlines will be the international travel which even the Qantas boss has said won't be resolved for 2-3 years.

Regional traffic ought not to be such a problem though, if we can keep the border closed to international travellers and contain our internal problem (which might mean putting a donkey-proof fence round Victoria.)

So surely it can't be too long before REX can get back to full operation.

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  • 1 month later...

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