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stretchjet
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 2:26 am

long time reader first time poster
here's my 2 cents I think rex could maybe pick up tiger's 8 A320's, pilots and cabin crew give the planes a quick repaint and new uniforms for the crew, hay presto expansion done! they have the hubs in Melbourne Sydney witch would interline with currant regional network
 
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RyanairGuru
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 2:27 am

brucetiki wrote:
Have Rex actually bought any aircraft in their time, or are still purely running on aircraft they inherited?


Never brand new but they have bought a lot of second hand Saab340s, especially from Colgan and American. Indeed one of them is still flying in the basic US Airways livery, and has been for several years now.
Worked Hard, Flew Right
 
tullamarine
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 3:02 am

CraigAnderson wrote:
More non-paywalled stories on Rex plans for capital city flights.

https://www.executivetraveller.com/news ... hts-routes

https://www.smh.com.au/business/compani ... 54s3y.html

I realize it’s only speculation but A320neo jets would be a great point of differentiation to the Boeing 737s of QF and VA, and the idea of a ‘Euro-business class’ premium cabin won’t thrill the ardent frequent flyers but it’s totally appropriate to short trips like SYD-MEL and in keeping with affordable fares for a middle of the market carrier.

Why would it be great differentiation? Most people couldn't tell you what sort of plane tjey are on and don't care as long as it is safe. A fleet of only 10 planes is nowhere near enough to have sufficient frequency to attract much business clientele.

No wonder the REX chairman was trying to talk down VA2 last week. He was probably hoping to get access to infrastructure such as gates, ground equipment at cheap cost and a revived VA will deny him a lat of that.
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smi0006
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 4:05 am

tullamarine wrote:
CraigAnderson wrote:
More non-paywalled stories on Rex plans for capital city flights.

https://www.executivetraveller.com/news ... hts-routes

https://www.smh.com.au/business/compani ... 54s3y.html

I realize it’s only speculation but A320neo jets would be a great point of differentiation to the Boeing 737s of QF and VA, and the idea of a ‘Euro-business class’ premium cabin won’t thrill the ardent frequent flyers but it’s totally appropriate to short trips like SYD-MEL and in keeping with affordable fares for a middle of the market carrier.

Why would it be great differentiation? Most people couldn't tell you what sort of plane tjey are on and don't care as long as it is safe. A fleet of only 10 planes is nowhere near enough to have sufficient frequency to attract much business clientele.

No wonder the REX chairman was trying to talk down VA2 last week. He was probably hoping to get access to infrastructure such as gates, ground equipment at cheap cost and a revived VA will deny him a lat of that.


Gates at VAs terminals are all technically common use in the airport precinct. Although you can’t tell due to high levels of branding being present, this differes from QF terminal leases. You often see this in SYD with JQ departing from VA branded gates. I think we’ll see more of this common use approach to domestic terminals in AU like we do in the international terminals. I doubt ZL would pick up any GSE themselves they would be mad to, far better to get Swissport in as they will have the capacity after the TT/VA draw down, even if VA does return.

Seems like an interesting move by ZL if they can get the finances, a hybrid carrier with EuroBusiness, eventually taking over the VA lounges etc make more sense to me to grow rather than VA mk2 with a brand consumers maybe hesitant to book with again. Rebrand in 12-18months, something fresh like the B6 brand, but won’t date as quickly as DJ/VA did. Who currently hold the largest shares in ZL?
 
tullamarine
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 4:38 am

stretchjet wrote:
long time reader first time poster
here's my 2 cents I think rex could maybe pick up tiger's 8 A320's, pilots and cabin crew give the planes a quick repaint and new uniforms for the crew, hay presto expansion done! they have the hubs in Melbourne Sydney witch would interline with currant regional network

Not quite that simple. Rex would need to achieve an AOC for A320s which is a lot more complicated than a repaint and uniforms.
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cam747
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 4:47 am

tullamarine wrote:

No wonder the REX chairman was trying to talk down VA2 last week. He was probably hoping to get access to infrastructure such as gates, ground equipment at cheap cost and a revived VA will deny him a lat of that.


Interesting you say that, I thought exactly the same thing. When I read the comments from Lim Kim Hai last week, although I agreed with most of what he said, I thought it was incredibly ungracious for a Chairman to stick the boot in during the current climate. Now I see there was more to it than just hubris.
 
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RyanairGuru
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 5:46 am

tullamarine wrote:
stretchjet wrote:
long time reader first time poster
here's my 2 cents I think rex could maybe pick up tiger's 8 A320's, pilots and cabin crew give the planes a quick repaint and new uniforms for the crew, hay presto expansion done! they have the hubs in Melbourne Sydney witch would interline with currant regional network

Not quite that simple. Rex would need to achieve an AOC for A320s which is a lot more complicated than a repaint and uniforms.


I assume stretchjet was thinking Rex would basically buy Tiger whole, including their AOC and ops team. Given that TT is all-but-worthless it could be a very inexpensive acquisition, but would deliver a bit of money for the VAH administrator who would probably end up liquidating it otherwise.
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bjwonline
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 6:32 am

Does anyone know when the 2 QF380’s that are in DRS are due out? Once they are released, where will they be stored? As QF have said they won’t be progressing with any more refurbs at this time, these two coming home will result in a net increase of stored AC.
 
tullamarine
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 6:59 am

RyanairGuru wrote:
tullamarine wrote:
stretchjet wrote:
long time reader first time poster
here's my 2 cents I think rex could maybe pick up tiger's 8 A320's, pilots and cabin crew give the planes a quick repaint and new uniforms for the crew, hay presto expansion done! they have the hubs in Melbourne Sydney witch would interline with currant regional network

Not quite that simple. Rex would need to achieve an AOC for A320s which is a lot more complicated than a repaint and uniforms.


I assume stretchjet was thinking Rex would basically buy Tiger whole, including their AOC and ops team. Given that TT is all-but-worthless it could be a very inexpensive acquisition, but would deliver a bit of money for the VAH administrator who would probably end up liquidating it otherwise.

It depends. The administrator is keen for a clean single transaction. An acquirer of VA may be prepared to pay more if TT was included and then eliminated rather than risking the easy emergence of a competitor. The administrator wouldn't be interested in the $50M sale of TT if it meant the sale price of the VA business dropped by $100M.
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Deano969
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 7:30 am

REX hubs are Brisbane Sydney Melbourne Adelaide, Perth and Cairns sort of
They have an established regional feeder network, many of whom on transit anyway, so they have a ready market that would fill a percentage of their interline network regardless
With a fleet of 10, they would only need to cover Perth 1-2 daily and the rest should be easily covered at 3-5 daily
737 / A320 meh
More likely F100s at least they would be the same vintage as their SAABs
 
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CraigAnderson
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 7:43 am

Deano969 wrote:
REX hubs are Brisbane Sydney Melbourne Adelaide, Perth and Cairns sort of
They have an established regional feeder network, many of whom on transit anyway, so they have a ready market that would fill a percentage of their interline network regardless
With a fleet of 10, they would only need to cover Perth 1-2 daily and the rest should be easily covered at 3-5 daily
737 / A320 meh


Sounds good, Rex doesn't need anywhere near the same frequency as its competitors on this capital city backbone, it would no doubt look to align timings with its regional flights to serve as connections, and getting other passengers would be a bonus and very possible if it has the right product for the market. For me that 'right product' means decent seats, including 'Euro business class' if the price is right, and adopting an NZ-style 'Seats to Suit' model. Forget about inflight meals, maybe even forget about IFE and WiFi at least for SYD-MEL, SYD-BNE etc. But their shabby lounges will beed some work!
 
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Chipmunk1973
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 7:44 am

SYDSpotter wrote:
The plan is the lease jets rather than buy jets. The reports are that they are aiming to raise $200m to lease up to 10 aircraft. The $200m potential investment is twice their current market capitalisation!

If the domestic aviation sector is fundamentally different post COVID-19, then their plan could work. But if the market returns to how it was previously and VA emerge to be 70-80% of their original size, Rex are dead in the water IMHO. 10 aircraft just isn't going to cut it for domestic flying between the main capital cities, TigerAir couldn't make it work with a similar amount of aircraft.


Certainly seems interesting if they can pull it off. Seeing an A320 in REX livery would certainly be something different.

I agree that 10 aircraft may not be putting a dent into JQ/QF and born again VA, but if I recall DJ started initially with just two 737s. However they did benefit from the Ansett collapse.

In terms of config/layout, I’d imagine a Y seat at a horrible 31” pitch. As they offer a few seats with slightly more legroom on the Saab’s, perhaps the first three rows could be at a 34” pitch. During peak times they could offer the “Euro Business Light” option by blocking off the middle seat. At non peak times just sell them as 3 seats with more space for a few dollars extra.

Personally I believes Tiger’s woes extend well beyond just having a small fleet size; on time performance, poor PR, fleet groundings, just to name a few.
Cheers,
C1973
 
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Chipmunk1973
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 7:48 am

Deano969 wrote:
REX hubs are Brisbane Sydney Melbourne Adelaide, Perth and Cairns sort of
They have an established regional feeder network, many of whom on transit anyway, so they have a ready market that would fill a percentage of their interline network regardless
With a fleet of 10, they would only need to cover Perth 1-2 daily and the rest should be easily covered at 3-5 daily
737 / A320 meh
More likely F100s at least they would be the same vintage as their SAABs


I personally thought an A220 to be a better fit for most of their new plans but given its “newness”, it may be cheaper to lease an A320.
Cheers,
C1973
 
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CraigAnderson
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 7:49 am

tullamarine wrote:
Why would it be great differentiation? Most people couldn't tell you what sort of plane tjey are on and don't care as long as it is safe. A fleet of only 10 planes is nowhere near enough to have sufficient frequency to attract much business clientele.


A320neos would be part of the new Rex capital city service image, not that it would attract people because they are A320neos but it'd let Rex talk them up as a point of differentiation and also talk up that they are quiet, spacious and modern, all of which is true. Most 'business class travellers' will be impossible to shift away from QF and Virgin Australia but Rex doesn't need them as much as it just needs passengers, that includes most business travellers who don't actually fly in business class, and with a few flights a day plus the right product and price, and that's very important, it can get those. It will never compete against QF for status and lounges and what-not but it doesn't need to and it shouldn't try to.
 
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CraigAnderson
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 7:51 am

Chipmunk1973 wrote:
I personally thought an A220 to be a better fit for most of their new plans but given its “newness”, it may be cheaper to lease an A320.


I'd agree, the A220 would be a very good size for the Rex city-to-city service but there would probably be far more A320neos out there waiting to be picked up, so it's supply and demand.
 
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Chipmunk1973
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 8:00 am

CraigAnderson wrote:
Sounds good, Rex doesn't need anywhere near the same frequency as its competitors on this capital city backbone, it would no doubt look to align timings with its regional flights to serve as connections, and getting other passengers would be a bonus and very possible if it has the right product for the market. For me that 'right product' means decent seats, including 'Euro business class' if the price is right, and adopting an NZ-style 'Seats to Suit' model. Forget about inflight meals, maybe even forget about IFE and WiFi at least for SYD-MEL, SYD-BNE etc. But their shabby lounges will beed some work!


Agree with your comments about the right product and I mentioned an option in a reply I just made. For the shortish flights along the east coast capitals (BNE, MEL, SYD), I don’t believe they need to offer meals other than just water. They could easily parter with someone to offer a Rex branded pop-up style cafe near it’s boarding gates to sell snacks and maybe gourmet sandwiches to take on board.

However if I was selling even a “Euro Business Seat”, I’d think about throwing a few extras just to make it slightly appealing. If they offered free tea, coffee, beer, wine and some gourmet snacks etc, during a peak hour flight, it’d be more enticing and catering for about a dozen seats would be fairly straight forward.

IFE is wasted on these flights, especially when most people have a smart phone or tablet these days.
Cheers,
C1973
 
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Chipmunk1973
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 8:17 am

Whilst I personally love the idea of REX wanting to offer more competition on routes, ambitious plans and best intentions don’t make a business successful. I would think offering a freight service would help sustain an expanded passenger service. However, I’m sure that the big freight services in this country are in well established, long term contracts. This would have to include, Fed-Ex, UPS, DHL, Aust Post (inc. Star Track).

So who does that leave for REX to team up with? Perhaps, they’ve already discussed a deal with someone we don’t know about yet?
Cheers,
C1973
 
zkncj
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 8:26 am

RyanairGuru wrote:
tullamarine wrote:
stretchjet wrote:
long time reader first time poster
here's my 2 cents I think rex could maybe pick up tiger's 8 A320's, pilots and cabin crew give the planes a quick repaint and new uniforms for the crew, hay presto expansion done! they have the hubs in Melbourne Sydney witch would interline with currant regional network

Not quite that simple. Rex would need to achieve an AOC for A320s which is a lot more complicated than a repaint and uniforms.


I assume stretchjet was thinking Rex would basically buy Tiger whole, including their AOC and ops team. Given that TT is all-but-worthless it could be a very inexpensive acquisition, but would deliver a bit of money for the VAH administrator who would probably end up liquidating it otherwise.


That or REX wet-leases some A320/737s from someone in Asia Pacific, in the short-term as minimal loss trail run for 12 months and maybe strikes an deal to provide cabin crew.
 
oskarclare
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 8:27 am

Virgin looking to provide 'conditional travel credit'. Credits would only be valid for booking during the airline's administration period.

https://www.executivetraveller.com/news ... no-refunds
https://www.smh.com.au/business/compani ... 54s8m.html
 
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eta unknown
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 8:50 am

"conditional travel credits" (valid for a very short period of time with no guarantee they can be used)...The VA situation just keeps deteriorating...
 
SYDSpotter
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 9:02 am

CraigAnderson wrote:

A320neos would be part of the new Rex capital city service image, not that it would attract people because they are A320neos but it'd let Rex talk them up as a point of differentiation and also talk up that they are quiet, spacious and modern, all of which is true. Most 'business class travellers' will be impossible to shift away from QF and Virgin Australia but Rex doesn't need them as much as it just needs passengers, that includes most business travellers who don't actually fly in business class, and with a few flights a day plus the right product and price, and that's very important, it can get those. It will never compete against QF for status and lounges and what-not but it doesn't need to and it shouldn't try to.


A320neo's are wishful thinking. If it's not competing with QF for the higher yielding business customer, why would you pay higher leasing rates for a 'newer' and 'more spacious' A320neo when a A320ceo will do the job just fine? You can forget about the fuel-burn savings from the NEO vs CEO/737NG given oil prices are at rock bottom.

REX have said they will aim to position their operations "halfway between a full-service airline and a low-cost airline", so it doesn't need brand new shiny jets to differentiate itself. There will also be plenty more 737NG's and A320ceo's available compared to A320neo's, so you'll get a much better deal leasing the previous generation jets.
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Aviator34ID
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 9:23 am

The Rex possibility is a very interesting development.

Many people in this thread said VA had to be saved by the Government (that is, the the taxpayers) because QF would have a monopoly and exploit the market. Myself and others said if there is a market demand unfilled, someone will come along and fill it. It does not have to be same old, same old.

One of the interesting things to watch amongst all the wreckage of the virus is the innovators and creative people who can see a new opportunity.in whatever industry it is.
 
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RyanairGuru
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 9:44 am

Chipmunk1973 wrote:
SYDSpotter wrote:
The plan is the lease jets rather than buy jets. The reports are that they are aiming to raise $200m to lease up to 10 aircraft. The $200m potential investment is twice their current market capitalisation!

If the domestic aviation sector is fundamentally different post COVID-19, then their plan could work. But if the market returns to how it was previously and VA emerge to be 70-80% of their original size, Rex are dead in the water IMHO. 10 aircraft just isn't going to cut it for domestic flying between the main capital cities, TigerAir couldn't make it work with a similar amount of aircraft.


Certainly seems interesting if they can pull it off. Seeing an A320 in REX livery would certainly be something different.

I agree that 10 aircraft may not be putting a dent into JQ/QF and born again VA, but if I recall DJ started initially with just two 737s. However they did benefit from the Ansett collapse.

In terms of config/layout, I’d imagine a Y seat at a horrible 31” pitch. As they offer a few seats with slightly more legroom on the Saab’s, perhaps the first three rows could be at a 34” pitch. During peak times they could offer the “Euro Business Light” option by blocking off the middle seat. At non peak times just sell them as 3 seats with more space for a few dollars extra.

Personally I believes Tiger’s woes extend well beyond just having a small fleet size; on time performance, poor PR, fleet groundings, just to name a few.


That "horrible" 31" would be the market leader in Australia ;)

Qantas and Virgin are both 30" in economy on their 737 fleets, while Jetstar and Tiger are 28" on their A320s. Virgin Blue used to have 32" seats, but that was decreased when VA introduced business class.
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VHTAE
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 10:00 am

stretchjet wrote:
long time reader first time poster
here's my 2 cents I think rex could maybe pick up tiger's 8 A320's, pilots and cabin crew give the planes a quick repaint and new uniforms for the crew, hay presto expansion done! they have the hubs in Melbourne Sydney witch would interline with currant regional network


Totally agree. It’s pretty much what REX is after to concentrate on the key trunk routes.
 
QF742
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 10:51 am

CraigAnderson wrote:
Deano969 wrote:
REX hubs are Brisbane Sydney Melbourne Adelaide, Perth and Cairns sort of
They have an established regional feeder network, many of whom on transit anyway, so they have a ready market that would fill a percentage of their interline network regardless
With a fleet of 10, they would only need to cover Perth 1-2 daily and the rest should be easily covered at 3-5 daily
737 / A320 meh


Sounds good, Rex doesn't need anywhere near the same frequency as its competitors on this capital city backbone, it would no doubt look to align timings with its regional flights to serve as connections, and getting other passengers would be a bonus and very possible if it has the right product for the market. For me that 'right product' means decent seats, including 'Euro business class' if the price is right, and adopting an NZ-style 'Seats to Suit' model. Forget about inflight meals, maybe even forget about IFE and WiFi at least for SYD-MEL, SYD-BNE etc. But their shabby lounges will beed some work!


How many passengers per day would REX have to connect into a trunk domestic network? Is that really enough to support even 10 737 size aircraft.

The REX situation worries me - it sounds like the owners of the company have their own agenda in scaring off bidders in the VA process. I just can’t see how they could take on such a high level of risk given that they are only a small regional carrier.

In pure hypothetical world - I think some form of tie up between REX and VA could work - maybe rebrand VA to REX - has a cute and fun kinda name that would work for a hybrid model airline.
 
qf002
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 11:22 am

If anything, surely REX would look at expanding into FIFO charters before they made a move into the mainline space? A lot of uncertainty around VARA at the moment (a separate AOC doesn't insulate them against the impacts of VA's administration) and super low-risk since you can get the contracts in place before committing to aircraft leases etc.

Then a year or two later they could look at expanding from the charter base into mainline. Either way, I think it's been clear for some time now that ZL needs to diversify their business. They seem to have their heads in the sand if they think they can just continue on as they have been without renewing their fleet forever.
 
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CraigAnderson
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 12:49 pm

"No sh*t, Sherlock!"

"AUSTRALIA RECORDS LARGEST EVER DROP IN OVERSEAS VISITORS", latest ABS date shows visitor arrivals in Australia crashed 60 per cent year-on-year in March.

That's a massive drop but I'm still surprised that there's 40% of the year-on-year total of visitors. Who on earth is coming to Australia as a 'visitor' and spending two weeks in lockdown at the ScoMo Sofitel?

https://australianaviation.com.au/2020/ ... ors-83130/
 
qf002
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 12:58 pm

CraigAnderson wrote:
That's a massive drop but I'm still surprised that there's 40% of the year-on-year total of visitors. Who on earth is coming to Australia as a 'visitor' and spending two weeks in lockdown at the ScoMo Sofitel?


The borders were still open for the first half of March, the self-quarantine order didn't come in until 15 March and hotel quarantine didn't start until April.

April's visitor figures will be virtually zero.
 
Gangurru
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 1:01 pm

CraigAnderson wrote:
"No sh*t, Sherlock!"

"AUSTRALIA RECORDS LARGEST EVER DROP IN OVERSEAS VISITORS", latest ABS date shows visitor arrivals in Australia crashed 60 per cent year-on-year in March.

That's a massive drop but I'm still surprised that there's 40% of the year-on-year total of visitors. Who on earth is coming to Australia as a 'visitor' and spending two weeks in lockdown at the ScoMo Sofitel?

https://australianaviation.com.au/2020/ ... ors-83130/


Travel was still allowed for most of March. The borders closed on March 20th and the 14 day quarantine started on March 29th. It feels like a lifetime ago.
 
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CraigAnderson
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 1:10 pm

Also, I noticed when I looked at the story above that Australian Aviation seems to have another new owner, a company called Momentum Media which has a slew of industry 'vertical' titles. Isn't this something like the third or even fourth owner in as many years? It was for a very long time produced down in Canberra by Gerard Frawley, then it moved to Sydney under some aviation entrepreneur, but it seemed to have changed hands again, and then been sold to Momentum, or did I mis something?
 
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CraigAnderson
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Re: Australian Aviation Thread - May 2020

Tue May 12, 2020 10:45 pm

Virgin Australia administrator's document to potential bidders says the airline intends to launch a new low-cost carrier

He forecast Virgin Mark II would earn $1.1 billion EBITDAR from its domestic operations and from its short haul international operations, $150 million from its long haul international business and $150 million from a new low-cost carrier in the domestic market, which would compete with Jetstar.
The idea that Virgin could develop and launch an entirely new discount airline service while trying to extract itself from insolvency is implausible, especially considering it has not been able to make a profit on group revenue of $5.8 billion.
The new discount airline is represented in the documents as a blank aircraft.


https://www.afr.com/chanticleer/virgin- ... 511-p54run

This is absolutely crazy! Virgin had Tiger, has pretty much dropped it and now sees a role for a new LCC, in this already depressed market? Yet, it could be called it Virgin Express to keep the brand connection there, but it all is beginning to sound like Borghetti is a secret member of the admin team, whispering from behind the curtains to recreate 'his' Virgin with all its flaws. Just joking about JB's role, but surely any potential buyer would want to see Virgin Mk II take a shape which it believers is sustainable and profitable, not just have the administrator draw up his on-paper plan for Virgin Mk II and ask investors to plonk down a few billion in cash for it.

The administrator has previously talked up the bidders as being high-quality, professional, experienced etc and every bidder will have people with solid airline and aviation experience on the team, so why the administrators are carrying on with imagining their preferred version of the airline totally escapes me!
 
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qf2220
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Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 1:55 am

RyanairGuru wrote:
brucetiki wrote:
Have Rex actually bought any aircraft in their time, or are still purely running on aircraft they inherited?


Never brand new but they have bought a lot of second hand Saab340s, especially from Colgan and American. Indeed one of them is still flying in the basic US Airways livery, and has been for several years now.


Wow fascinating. Here is an image

https://commons.wikimedia.org/wiki/File:Regional_Express_Airlines_(VH-ZXF),_now_wearing_REX_livery_over_the_ex_US_Airways_Express,_Saab_340B_at_Wagga_Wagga_Airport.jpg
 
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qf2220
Posts: 1948
Joined: Fri Aug 16, 2013 9:16 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 2:09 am

CraigAnderson wrote:
Virgin Australia administrator's document to potential bidders says the airline intends to launch a new low-cost carrier

He forecast Virgin Mark II would earn $1.1 billion EBITDAR from its domestic operations and from its short haul international operations, $150 million from its long haul international business and $150 million from a new low-cost carrier in the domestic market, which would compete with Jetstar.
The idea that Virgin could develop and launch an entirely new discount airline service while trying to extract itself from insolvency is implausible, especially considering it has not been able to make a profit on group revenue of $5.8 billion.
The new discount airline is represented in the documents as a blank aircraft.


https://www.afr.com/chanticleer/virgin- ... 511-p54run

This is absolutely crazy! Virgin had Tiger, has pretty much dropped it and now sees a role for a new LCC, in this already depressed market? Yet, it could be called it Virgin Express to keep the brand connection there, but it all is beginning to sound like Borghetti is a secret member of the admin team, whispering from behind the curtains to recreate 'his' Virgin with all its flaws. Just joking about JB's role, but surely any potential buyer would want to see Virgin Mk II take a shape which it believers is sustainable and profitable, not just have the administrator draw up his on-paper plan for Virgin Mk II and ask investors to plonk down a few billion in cash for it.

The administrator has previously talked up the bidders as being high-quality, professional, experienced etc and every bidder will have people with solid airline and aviation experience on the team, so why the administrators are carrying on with imagining their preferred version of the airline totally escapes me!


This is a reminder that administrators are not strategy gurus in the sectors that they administer.....
 
xiaotung
Posts: 1071
Joined: Fri Jan 06, 2006 7:58 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 2:10 am

CraigAnderson wrote:
Virgin Australia administrator's document to potential bidders says the airline intends to launch a new low-cost carrier

He forecast Virgin Mark II would earn $1.1 billion EBITDAR from its domestic operations and from its short haul international operations, $150 million from its long haul international business and $150 million from a new low-cost carrier in the domestic market, which would compete with Jetstar.
The idea that Virgin could develop and launch an entirely new discount airline service while trying to extract itself from insolvency is implausible, especially considering it has not been able to make a profit on group revenue of $5.8 billion.
The new discount airline is represented in the documents as a blank aircraft.


https://www.afr.com/chanticleer/virgin- ... 511-p54run

This is absolutely crazy! Virgin had Tiger, has pretty much dropped it and now sees a role for a new LCC, in this already depressed market? Yet, it could be called it Virgin Express to keep the brand connection there, but it all is beginning to sound like Borghetti is a secret member of the admin team, whispering from behind the curtains to recreate 'his' Virgin with all its flaws. Just joking about JB's role, but surely any potential buyer would want to see Virgin Mk II take a shape which it believers is sustainable and profitable, not just have the administrator draw up his on-paper plan for Virgin Mk II and ask investors to plonk down a few billion in cash for it.

The administrator has previously talked up the bidders as being high-quality, professional, experienced etc and every bidder will have people with solid airline and aviation experience on the team, so why the administrators are carrying on with imagining their preferred version of the airline totally escapes me!


I can understand if they keep the long haul routes as no one will buy their widebody aircraft in this environment. So you either park them or fly them. But creating another sub LCC brand is crazy. What's wrong with the NZ S2S model which has proven successful.
 
eamondzhang
Posts: 1733
Joined: Thu Sep 23, 2010 8:23 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 4:05 am

May not be 100% civil aviation related but just received Avalon's media release saying Avalon 2021 will be deferred to November 2021.

Michael
 
Scanorama
Posts: 148
Joined: Sat Jan 22, 2005 4:04 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 4:32 am

CraigAnderson wrote:
Also, I noticed when I looked at the story above that Australian Aviation seems to have another new owner, a company called Momentum Media which has a slew of industry 'vertical' titles. Isn't this something like the third or even fourth owner in as many years? It was for a very long time produced down in Canberra by Gerard Frawley, then it moved to Sydney under some aviation entrepreneur, but it seemed to have changed hands again, and then been sold to Momentum, or did I mis something?

I've got an email from them about six weeks ago saying that the bi-monthly magazine (which was changed from monthly with the launch of the 'World of Aviation') will move to quarterly from May.
 
smi0006
Posts: 2548
Joined: Wed Jan 16, 2008 7:45 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 4:58 am

qf2220 wrote:
RyanairGuru wrote:
brucetiki wrote:
Have Rex actually bought any aircraft in their time, or are still purely running on aircraft they inherited?


Never brand new but they have bought a lot of second hand Saab340s, especially from Colgan and American. Indeed one of them is still flying in the basic US Airways livery, and has been for several years now.


Wow fascinating. Here is an image

https://commons.wikimedia.org/wiki/File:Regional_Express_Airlines_(VH-ZXF),_now_wearing_REX_livery_over_the_ex_US_Airways_Express,_Saab_340B_at_Wagga_Wagga_Airport.jpg


Ha! I always wondered why there were two versions of the Rex livery, assumed one was an update never twigged it was US-Airways underneath. Actually looks rather good tbh.
 
Deano969
Posts: 19
Joined: Mon Apr 27, 2020 6:12 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 5:17 am

qf002 wrote:
If anything, surely REX would look at expanding into FIFO charters before they made a move into the mainline space? A lot of uncertainty around VARA at the moment (a separate AOC doesn't insulate them against the impacts of VA's administration) and super low-risk since you can get the contracts in place before committing to aircraft leases etc.

Then a year or two later they could look at expanding from the charter base into mainline. Either way, I think it's been clear for some time now that ZL needs to diversify their business. They seem to have their heads in the sand if they think they can just continue on as they have been without renewing their fleet forever.


I would be confident that REX already has numbers for regional passengers that interlined with VA in particular
There was no particular need to interline in the past as VA did the job
Take VA away and that leaves QF who understandably would only try to poach their passengers on regional routes they compete with and Airline "X" that may or may not start soon enough, or ever, or may start their own regional opps in competition to REX

So REX may be doing this to preserve the regional network they have
You can easily book a flight from Wagga to Isa on QF, this is not possible with REX without VA
 
AVB
Posts: 38
Joined: Sat Sep 08, 2018 7:43 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 5:39 am

Deano969 wrote:
qf002 wrote:
If anything, surely REX would look at expanding into FIFO charters before they made a move into the mainline space? A lot of uncertainty around VARA at the moment (a separate AOC doesn't insulate them against the impacts of VA's administration) and super low-risk since you can get the contracts in place before committing to aircraft leases etc.

Then a year or two later they could look at expanding from the charter base into mainline. Either way, I think it's been clear for some time now that ZL needs to diversify their business. They seem to have their heads in the sand if they think they can just continue on as they have been without renewing their fleet forever.


I would be confident that REX already has numbers for regional passengers that interlined with VA in particular
There was no particular need to interline in the past as VA did the job
Take VA away and that leaves QF who understandably would only try to poach their passengers on regional routes they compete with and Airline "X" that may or may not start soon enough, or ever, or may start their own regional opps in competition to REX

So REX may be doing this to preserve the regional network they have
You can easily book a flight from Wagga to Isa on QF, this is not possible with REX without VA


Similar to what happened to Impulse Airlines in the late 90s. Ansett ceased interlining with Impulse and booted them from the Merlin sales and ticket system. The only way they could survive or grow was to expand into the golden triangle.

If Rex wants to survive they need to expand their network to feed regional flights. Oh and how has no one questioned Rex crying poor, forcing the government for subsidies then announcing a $200m expansion? Aviation execs are such shonky operators.
 
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CraigAnderson
Posts: 540
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Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 6:16 am

Here's an interesting snippet from https://www.afr.com/street-talk/who-s-w ... 420-p54laj

Apparently Alliance Aviation is looking to expand its own regional routes and compete with Rex.

"The idea would be to use what Alliance is owed by Virgin Australia Regional Airlines, its affiliate, and the new investor's funds to lease more ATR aircraft and go head-to-head with Rex on more routes."

This is all getting a bit heated, isn't it. At a time when domestic travel has collapsed and recovery will be slow on its own terms due to state travel restrictions, let alone factoring in that many people might not be willing to travel due to lack of consumer confidence if they see a recession coming, or just lack of funds due to a business downturn and unemployment, you've got people trying to rebuild and relaunch Virgin Australia, VA management talking up plans for a new LCC, Rex wanting to add capital city routes and Alliance wanting to expand into more regional routes.

It's almost like 'peak aviation' arriving during a trough of demand!
 
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CraigAnderson
Posts: 540
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Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 6:28 am

Scanorama wrote:
I've got an email from them about six weeks ago saying that the bi-monthly magazine (which was changed from monthly with the launch of the 'World of Aviation') will move to quarterly from May.


Wow, that was fast. It was monthly until they announced World of Aviation, the idea was that AA would be one month and WoA the next, then WoA was shut down I think before issue #2 or certainly issue #3, and now AA is going quarterly.

I suppose it's impossible for a monthly magazine to do 'news' these days so it needs to be more in-depth material, interviews and analysis and 'thought pieces', maybe a quarterly can focus on doing that really well if they have more time to put it together.

World of Aviation struck me as a very good idea but maybe it was just really bad timing, the worst timing actually!
 
tullamarine
Posts: 2485
Joined: Thu Aug 05, 1999 1:14 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 6:30 am

I have no issue if REX wants to enter the ainline domestic market though personally see it as doomed with the name OzJet springing to mind. What I don't want to see happen is for REX to Pi$$ a whole lot of money up against a tree on a doomed jet expansion and then cry poor to the government saying they need support or else key regional centres will lose their aviation connections.

Hopefully the government is wise to this but ex National Party Transport minister John Sharp is chairman of REX so is probably already crying poor to current Transport minister and Nats leader Michael McCormack.
717, 721/2, 732/3/4/5/7/8/9, 742/3/4, 752/3, 762/3, 772/E/W, 788/9, 300,310, 319,320/1, 332/3, 359, 388, DC9, DC10, F28, F100, 142,143, E75/90, CR2, D82/3/4, SF3, ATR
 
NZ801
Posts: 14
Joined: Mon Apr 20, 2020 9:06 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 8:11 am

Because Queensland politics is always crazy, they’ve launched a bid for VA. It feels like every man and his dog are having a go.

https://www.smh.com.au/politics/queensl ... 54sny.html
 
SYDSpotter
Posts: 883
Joined: Tue Oct 30, 2012 9:10 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 8:32 am

NZ801 wrote:
Because Queensland politics is always crazy, they’ve launched a bid for VA. It feels like every man and his dog are having a go.

https://www.smh.com.au/politics/queensl ... 54sny.html


Well the plot thickens...

The potential bid will be done through QIC, the state's investment vehicle. If successful, there are 2 big issues I see:

1) QF would not be happy, they will argue there is no longer a level playing field with a publicly owned company going up against a government (state) owned company. They would probably demand a Federal government guarantee of their loans.
2) The other states would not be happy and would demand that Federal aviation assistance for VA ceases immediately. If VA were to continue receiving the support package once owned by QIC, the support would effectively be Federal support for keeping jobs in QLD at the expense of other states. If VA was bought another consortium, there would be no guarantee VA keeps their HQ in Brisbane.

Interesting times...
319_320_321_332_333_359_388 / 734_737_738_743_744_762_763_772_773_77W_788_789
 
Flyingsottsman
Posts: 798
Joined: Mon Oct 25, 2010 12:32 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 9:01 am

SYDSpotter wrote:
NZ801 wrote:
Because Queensland politics is always crazy, they’ve launched a bid for VA. It feels like every man and his dog are having a go.



https://www.smh.com.au/politics/queensl ... 54sny.html


Well the plot thickens...

The potential bid will be done through QIC, the state's investment vehicle. If successful, there are 2 big issues I see:

1) QF would not be happy, they will argue there is no longer a level playing field with a publicly owned company going up against a government (state) owned company. They would probably demand a Federal government guarantee of their loans.
2) The other states would not be happy and would demand that Federal aviation assistance for VA ceases immediately. If VA were to continue receiving the support package once owned by QIC, the support would effectively be Federal support for keeping jobs in QLD at the expense of other states. If VA was bought another consortium, there would be no guarantee VA keeps their HQ in Brisbane.

Interesting times...



Um, wonder if Jackie Trad would would go for the CEO's job? :duck:
 
User avatar
Velocity7
Posts: 81
Joined: Sat Apr 21, 2018 7:49 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 9:06 am

SYDSpotter wrote:
NZ801 wrote:
Because Queensland politics is always crazy, they’ve launched a bid for VA. It feels like every man and his dog are having a go.

https://www.smh.com.au/politics/queensl ... 54sny.html


Well the plot thickens...

The potential bid will be done through QIC, the state's investment vehicle. If successful, there are 2 big issues I see:

1) QF would not be happy, they will argue there is no longer a level playing field with a publicly owned company going up against a government (state) owned company. They would probably demand a Federal government guarantee of their loans.
2) The other states would not be happy and would demand that Federal aviation assistance for VA ceases immediately. If VA were to continue receiving the support package once owned by QIC, the support would effectively be Federal support for keeping jobs in QLD at the expense of other states. If VA was bought another consortium, there would be no guarantee VA keeps their HQ in Brisbane.

Interesting times...


Indeed, very interesting.

If QIC throw their hat in the ring, I'd imagine this would provide an interesting competitive tension across all potential bidders?
Did they not take a stake in an airport in Tasmania (?) last year?
 
dredgy
Posts: 488
Joined: Fri Jun 16, 2017 5:13 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 10:31 am

Velocity7 wrote:
SYDSpotter wrote:
NZ801 wrote:
Because Queensland politics is always crazy, they’ve launched a bid for VA. It feels like every man and his dog are having a go.

https://www.smh.com.au/politics/queensl ... 54sny.html


Well the plot thickens...

The potential bid will be done through QIC, the state's investment vehicle. If successful, there are 2 big issues I see:

1) QF would not be happy, they will argue there is no longer a level playing field with a publicly owned company going up against a government (state) owned company. They would probably demand a Federal government guarantee of their loans.
2) The other states would not be happy and would demand that Federal aviation assistance for VA ceases immediately. If VA were to continue receiving the support package once owned by QIC, the support would effectively be Federal support for keeping jobs in QLD at the expense of other states. If VA was bought another consortium, there would be no guarantee VA keeps their HQ in Brisbane.

Interesting times...


Indeed, very interesting.

If QIC throw their hat in the ring, I'd imagine this would provide an interesting competitive tension across all potential bidders?
Did they not take a stake in an airport in Tasmania (?) last year?


QIC owns a slice of Brisbane airport corporation as well as Hobart Airport. They are for-profit, and investing at the bottom of the market, regardless of what Dutton says its no riskier than QICs other investments (which mostly consist of high end retail malls in the US) and is likely to generate a return for the state as it has done consistently throughout its history.
 
timtam
Posts: 302
Joined: Tue Nov 19, 2013 2:02 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 12:32 pm

VA is not an infrastructure asset. QIC has no idea how to run an airline and it would become a disaster investment for them if they try.

But it doesnt really matter, QIC wont win the bid. The risks in VA will be too high for their risk appetite and so they wont be able to mount a competitive bid.

The only way QIC would have a chance is if they came in as the owner/financier of the physical assets and teamed up with another experienced airline entity who owned and operated the airline on a capital light basis. But it would still be a very risky investment.
 
moa999
Posts: 928
Joined: Tue Mar 13, 2018 6:37 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 1:15 pm

timtam wrote:
VA is not an infrastructure asset. QIC has no idea how to run an airline and it would become a disaster investment for them if they try.


Would also be interesting to see how much they've had to write down their airport, retail and travel investments in the last few months.
 
dredgy
Posts: 488
Joined: Fri Jun 16, 2017 5:13 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 1:49 pm

timtam wrote:
VA is not an infrastructure asset. QIC has no idea how to run an airline and it would become a disaster investment for them if they try.

But it doesnt really matter, QIC wont win the bid. The risks in VA will be too high for their risk appetite and so they wont be able to mount a competitive bid.


It's actually an incredibly low risk investment in the short to medium term. Coming in at the bottom of the market, the value will inevitably rise even if it is mismanaged to collapse in the long term - so long as they sell early.

But it's a moot point, QIC is seeking to partner with somebody else, who will likely be the managing partner, it's unlikely QIC will be the ones running it - aside from requiring head office in Queensland.

Their cash position isn't so great that they could buy the whole airline.

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