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Spotted: Is this the moment Virgin 737 goes to Rex?

written by Adam Thorn | November 2, 2020
Photographer Lenn Bayliss Rex Aviation 737 VH-VUF Wellcamp 30 October 2020 v2
Photographer Lenn Bayliss shoots VH-VUF at Wellcamp on 30 October 2020

Australian Aviation photographer Lenn Bayliss may have captured the moment a former Virgin 737 was being readied for delivery to new rival Rex as staff paint over its iconic tail branding.

Rex previously announced it was close to a deal to lease six 737-800 NG aircraft to fly its new network between Sydney, Melbourne and Brisbane, with speculation insisting some were from Virgin’s trimmed fleet.

Flightradar reveals VH-VUF msn 34168 departed Brisbane on 30 October as flight VA9908 at 8:20am and landed at Wellcamp half an hour later, when the photos were taken.

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The developments come after Rex announced in September it had signed a letter of intent with two lessors that will see three of the Boeing aircraft ready to fly between Sydney and Melbourne at launch, with another two to follow by Easter and the final one shortly after.

“From there, Rex will continue to grow the domestic fleet in line with the return of passenger demand and hopes to see its fleet of 737-800 NGs reach 10 by year end,” said Rex deputy chairman John Sharp.

“The signing of these letters marks another significant milestone for our entry into the domestic jet market. Our preparations are progressing very well and on schedule and we hope to obtain regulatory approval by December. Advanced ticket sales are also envisaged for December, subject to regulatory approval.”

The purchase was facilitated by PAG Asia Capital, which is set to initially invest $50 million for secured convertible notes that could allow it to hold 23 per cent of Rex’s shares by December.

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Rex executive chairman Lim Kim Hai said, “With PAG’s support, I have every reason to believe that Rex can successfully launch its domestic major city jet operations.”

After the initial investment, the regional carrier would then be able to draw down the remaining $100 million over three years, which would see PAG then hold 48 per cent of the business.

The deal, based on current issued share capital, is subject to due diligence being completed and a review by an independent expert.

“PAG is a well-respected and highly successful investment group which manages more than US$40 billion on behalf of major global institutional investors,” said Lim. “I am encouraged by the progress of Rex’s negotiations to date with an investor of PAG’s reputation and experience.”

In May, the airline first announced its ambitious plans to take on Qantas and Virgin by expanding its network to service Australian capital city routes, including the coveted Golden Triangle – between Melbourne, Sydney and Brisbane.

Speculation later linked the airline to the lease of 10 Boeing 737s from Virgin Australia.

The news that a deal for new routes and aircraft might be close comes after Rex recorded an underlying profit before tax of $250,000 and an increase in revenue, from $318 million last year to $322 million in FY20, despite the coronavirus crisis.

The positive results also marked a remarkable turnaround from March, when Rex warned it would have no choice but to announce the “shutting down of its network” if it didn’t receive financial aid, even threatening to stop transporting COVID-19 testing samples.

The strong performance was in part attributed to the company accepting $62.1 million of government grants, including JobKeeper and regional aviation bailouts.

7 Comments

  • Andrew

    says:

    Minor point – article states photo taken on 30th September at Wellcamp, photo caption states photo taken on 30th October

    • Adam Thorn

      says:

      Thanks. Was a typo and I have now updated.

      Adam

  • Ian

    says:

    Amazing what you can do with free government money!!

  • David Riddel

    says:

    Nice one, Lenn.

  • Shane

    says:

    A profit of $250,000. That should go back to the government as part of the money that was given to them cause of COVID.

  • Nick

    says:

    That was an FY20 profit, covid restrictions only impacted the last couple of months of it. Still far less than Qantas took.

  • Jack

    says:

    I agree! REX already had the profit to expand, the COVID-19 payments from the Government didn’t influence their expansion much.

    Also, Do we know if they are going to actually paint the 737? Thought they would have sent it to be repainted before being delivered to Sydney??

  • nfw

    says:

    That would be hands in our pockets taxpayer money.

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