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Discussion Starter · #1 ·
Rex Removes Fuel Levy
Tuesday, 30 June 2009


Regional Express (Rex) today announced that it will be incorporating the fuel levy into the base fare, effective for all new sales made from 1 July 2009.

Giving the rationale of the move, Rex General Manager, Network Strategy & Sales, Warrick Lodge said, “The fuel levy was introduced five years ago when it was felt necessary to be fully transparent to our customers about the significant impact of soaring fuel prices. Five years on, high fuel prices are here to stay and we believe it is time to retire the concept of fuel levy. Extreme volatility in fuel prices and just as extreme volatility of the exchange rate have now become part and parcel of the risks of an airline.”

“With the fuel levy incorporated into the fare structure, we will not see any change to the fully inclusive ticket price. Rex is proud to state that its current average fully inclusive ticket price is 5% lower than 6 years ago when Rex was founded, in spite of a more than doubling of the fuel price during the period.” said Mr Lodge.

Regional Express (Rex) is Australia’s largest independent regional airline operating a fleet of 40 Saab 340 aircraft on more than 1,300 flights weekly to 24 destinations from Sydney, Melbourne and Adelaide. The Rex Group comprises Regional Express, air freight and charter operator Pel-Air Aviation and Dubbo-based charter operator Air Link, as well as the Australian Airline Pilot Academy.
http://www.rex.com.au/MediaAndPressClippings/ShowNews.aspx?Site=IR&nid=211

I wonder whether other airlines will also make a similar move.
 

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Discussion Starter · #2 ·
Found some very interesting statistics on the NSW Govt. Transport website, re: intrastate air travel.
http://www.transport.nsw.gov.au/air/passenger-stats.html

The above provides details of the number of passengers on each monitored route per quarter, ex Sydney.

Very interesting to see that Albury has contracted despite being served by three carriers.

It would be good to see how many passengers per airline, but that would be commercial info so would be kept pretty hushed up.
 

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Discussion Starter · #3 ·
A few pics of the SAAB340s which Rex fly.
I flew with them to Wagga last year - both flights were packed.





It would be interesting to see how many fly Melbourne - Wagga. They seem to have several flights a day. From speaking to some of the passengers and the flight attendant, many fly down to Melbourne on Mondays and return Fridays.
 

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“With the fuel levy incorporated into the fare structure, we will not see any change to the fully inclusive ticket price. Rex is proud to state that its current average fully inclusive ticket price is 5% lower than 6 years ago when Rex was founded
5% is nothing :eek:hno:

What I cant understand is how they can always fill flights (from what I have seen) on SYD-Ballina. They are double as expensive as JQ/DJ and you are stuck in a tiny turbo compared to a larger jet and less frequencies etc..

Surely pax just dont know DJ/JQ fly the route? or are they loyal Ballina Locals?? cause I find it bizzare that Rex would be the pick over the other two...:nuts:
 

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Discussion Starter · #5 ·
They could have contracts with local businesses which fill seats, or some might find Rex's frequent flyer scheme more beneficial, hence why they're happy to pay extra. Rex's scheme gives you 1 free for every 10 flights you make.
 

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Does anyone know more than me about Strategic Airlines, a new Australian niche market airline? I read a small snippet in yesterday's aviation section on the Australian's website. They are looking at flying Brisbane-Honiara and Perth-Derby and are going to base two A320's in Europe???
 

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Discussion Starter · #9 ·
Does anyone know more than me about Strategic Airlines, a new Australian niche market airline? I read a small snippet in yesterday's aviation section on the Australian's website. They are looking at flying Brisbane-Honiara and Perth-Derby and are going to base two A320's in Europe???
Strategic Airlines is soon to be officially launched. It is currently operating some services, including charters for the ADF.
The airline is based in Brisbane, but has an office in Melbourne.
A330s and A320s make up the fleet.

Strategic bought OzJet off administrators in June. OzJet are currently operating a regular charter from Perth to Derby using a leased Fokker 100. This is to be upgraded to an A320.

Looks like they could really work out a niche in the charter industry. I know there is strong competition in WA for charters, but they look to be seeking a broader market, including group holidays etc.

According to this pdf they have launched operations to Honiara on behalf of Solomons Islands Airlines. Strategic supply the plane and crew, with Solomons Islands paying for it.
http://www.strategicaviation.com.au...trategic A320 to Fly for Solomon Airlines.pdf

As for Europe, it looks like they are trying to carve out a market in the EU.
http://www.strategicaviation.com.au...9Apr09 - Strategic enters European Market.pdf

Strategic won't pose any direct competition to Virgin, Jetstar, Tiger or Qantas, though Qantas could see some competition for defence charters.
 

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Discussion Starter · #11 ·
Dark future for Regional Aviation? REX to seek closer ties with Virgin or Qantaslink?

Regional airlines face plane shortage

Steve Creedy, Aviation writer | August 10, 2009
Article from: The Australian

AUSTRALIA'S smaller regional carriers face extinction unless new planes can be found to replace ageing aircraft, a senior airline official has warned.
The dire prediction from the nation's biggest independent regional carrier, Regional Express, comes as the government is preparing to release a White paper on the industry.

Rex managing director Jim Davis told an industry conference in Sydney that regional aviation was already extremely vulnerable, with eight smaller competitors going to the wall in recent years just in the Rex network alone.

” Regional air services are undergoing structural change which I believe is irreversible,” he said. “We're seeing the whole pattern change, were seeing the smaller operators disappear, were seeing the smaller aircraft disappear and were seeing a general contraction of the whole industry in the regions.”

The Rex executive outlined a series of problems facing the industry, including the disproportionate cost of meeting tougher safety regulations and installing new equipment in aircraft, competition on profitable routes from bigger airlines and chronic pilot shortages.

But he said the industry's ageing fleet of small airliners posed a huge problem that was unique to regional carriers.

”There a no new replacement aircraft available of less than 50 seats now,” he said. “This fact of life, if not changed will mean the eventual demise of all smaller regional airlines and that includes Rex, unless we upgrade and become a Qantaslink or Regional Virgin.”

Mr Davis said he saw no light at the end of the tunnel when it came to new planes and Rex's model depended on a 30-seat aircraft.

“The Saabs are good for another 15 years,” he said. “If nobody announces a new 19- or 30-seat aircraft in that time then we've got a major problem, as has every small airline.”

The problems facing the regional airlines have been growing for years and Mr Davis said almost none of 28 recommendations from a 2003 parliamentary report on the industry's problems had been acted upon.

The Rex boss also pointed to a Bureau of Infrastructure, Transport and Regional Economics report released last month that showed that between 1984 and 2005, the number of regional airports serviced by scheduled airlines fell from 278 to 170 and the number of regional carriers had dropped from 53 to 34.

“There's also been a high attrition rate and high turnover rate in the industry, with only five of those 34 airlines having operated continuously since 1984,” he said. “These are very sobering figures and they give a picture of an industry in very serious decline.”

Other problems affecting the regional industry included the disproportionate cost of meeting tougher safety regulations and installing new equipment in aircraft, Mr Davis said.

He said a move by bigger airlines to service more populous regional routes with jets, which could fly people for about the third per cost per seat than the 34-seat Saab planes used by Rex, was forcing smaller carriers off their most profitable routes.

Pilot shortages were also again expected to be a serious problem for regional carriers and Mr Davis said the government needed to make HECS funding available to the wider pilot training community if this was to be avoided.
http://www.theaustralian.news.com.au/business/story/0,28124,25908503-23349,00.html

Very interesting times ahead. It would be good if REX could remain independent of Virgin and Qantas as we need competition - even on regional routes.

I expect sooner rather than later, manufacturers will start to look at the size REX are after. There are plenty of operators in the US and even Europe and Japan with SAAB 340s and similarly sized planes. Bombardier, Dornier and Embraer will probably be the most likely manufacturers.
 

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Flew on REX out of Broken Hill this morning, 45 mnute hop down to Mildura.

Saab 340 was wearing the livery of a random Thai airline that it was leased to years ago. Strange sight but didn't effect the flight.

Feels very cosy inside those aircraft with 2x1 seating though as a solo traveler I enjoyed having my own side of the aisle. I thought QantasLink's Dash 8-200s seemed small!

Liked the little touch of the captain greeting & fareweling passengers on the tarmac. Very young crew, both in their mid 20s.

It's a shame though that whilst REX provide a decent basic service to rural areas that would have none without them, they don't really see the need to go above and beyond given their monopoly position.

Things like the lack of any frequent flyer scheme, no codeshares (apart from interlining bagging with Virgin), very small snacks provided with no option to purchase more and the high ticket prices.

But having said all that when the alternative is god knows how many hours in a car or bus....
 

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REX have a very low age crew I assume due to their Cadet Program, not sure if they have hired any pilots outside it since 2008. How many on the flight may I ask?

I am currently in the application stage for the cadet program so a little interested.
 

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^^ Probably about 20-25 on the flight, few more boarding at Mildura for the final leg to Sydney.

All but me and one other of the Broken Hill pax were staying onboard for the through trip.
 

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I'd like to know what Rex have in mind as a replacement for the Saabs when they finally come to the end of their lives. There's not much out there these days that are equivalent.
 

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I'd like to know what Rex have in mind as a replacement for the Saabs when they finally come to the end of their lives. There's not much out there these days that are equivalent.
Given that the newest SAABs are now 20 years old, this is an interesting question.

The choices are ATR or Bombardier. I wonder whether the higher cruise speed of the latter would be a factor given some sector lengths, or whether the cost trade-off would favour the ATR. And surely they'd go for the 72 or 400?
 

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Question: Does anyone have any links to information out there on why its somehow a better outcome to have government-granted monopolies on some of these regional routes rather than just allowing competition and let the free market sort it out?

Are these routes that would be unviable without a government subsidy? (presumably such a subsidy also needs a government-granted monopoly in order to work)
 

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They are unviable without it, REX made a loss this year and struggles to just make a profit most years. They also need government support because without government traffic/passangers it wouldn't work
 

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Most of their routes aren't subsidised. AFAIK only the Queensland milk run routes are.

Rex often seems to dump routes when they become unviable. I know that they dumped the Cooma route and re-started it a few years later, and one or two of the routes in this article have since been dumped which indicates that a lot of their operations are pretty marginal, hence if they started going badly a lot of places could stand to lose their whole service.

http://australianaviation.com.au/2011/06/rex-identifies-seven-vulenerable-routes/

And I thought I read an article that they were Australia's most profitable airline at one stage when the big two were returning huge losses and Rex were still making a bit of a profit?
 

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Given that the newest SAABs are now 20 years old, this is an interesting question.

The choices are ATR or Bombardier. I wonder whether the higher cruise speed of the latter would be a factor given some sector lengths, or whether the cost trade-off would favour the ATR. And surely they'd go for the 72 or 400?
Although only at conceptual stage at the moment the TRP328 maybe an option come replacement time in the next decade or so. A bit of a Dornier 328 rehash with a similar pax capacity and range (higher cruise speed) to the current Saab's. I find it strange that no manufacturer currently builds a prop for the <50 seat market..

http://www.trjet.com/Aircraft
 
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