iscover
A Cobham E190
Rex has today announced a “major expansion” of its new FIFO business to directly challenge Qantas in their strongholds of Queensland and the Northern Territory.
The business said it would “immediately” lease another two more Dash 8s on the very same day it formally completed the acquisition of the regional services wing of Cobham.
It comes after the Flying Kangaroo said it would fully acquire charter and FIFO operator Alliance, which has a strong network in the state and territory.
Qantas and Rex have been involved in a long-running dispute over network expansion, with Rex launching flights between major capital cities and Qantas flying on previously small, Rex-exclusive routes.
On Friday, Rex mocked Alliance’s “30-year-old” Fokker 100s and said resource companies in the Alliance stronghold of Queensland had been facing “severe issues with capacity and reliability in recent years”.
Executive Chairman Lim Kim Hai said, “There is no better operator of air services in Australia than the Rex Group, be it for reliability or financial performance.
“Over the last 14 years for example, when the entire global economy has been shaken to the core by the Global Financial Crisis and COVID-19, Rex has still managed to achieve a positive gross return of 2.9%, compared to Singapore Airlines’ 1.3 per cent, while Qantas showed a negative 1.9 per cent.
“In fact, over the last 18 years, Rex made more absolute accumulated profits than Qantas!
“Rex will overlay this financial and operational prowess on NJE’s core strengths to transform it to be Australia’s premier FIFO operator.
“Resource companies all over Australia can now count on a modern, comfortable and environmentally-friendly fleet for their FIFO needs instead of relying on 30-year-old Fokker 100 aircraft used predominantly by the other operators.
“In anticipation of the surge in demand for NJE’s services, we are looking to lease immediately another two De Havilland Canada Dash 8-400 NextGen (NG) aircraft to add to its fleet.”
Qantas’ deal to buy Alliance has, however, yet to be cleared by the ACCC, which has already raised concerns.
The Flying Kangaroo has remained bullish that any takeover would not hurt the “highly competitive charter segment”.
It currently holds a 19.9 per cent stake in the carrier, with the new agreement seeing it acquire the airline outright.
The business’ group executive of associated airlines, John Gissing, argued, “As the ACCC has previously acknowledged, customers in the resources flying segment are sophisticated and well-resourced companies with procurement expertise who have strong bargaining power in their negotiations with airlines and other operators.
“The resources sector continues to grow and any new tender for airline services will be very competitive. It makes a lot of sense for us to combine with Alliance to improve the services we can offer, which is a positive for both airlines as well as the travelling public.”
Earlier this week, Australian Aviation reported how the TWU’s submission to the ACCC on the deal said the national carrier “cannot be trusted” to compete fairly with rivals.
Rex said it should go ahead, but only with assurances that the pair’s simulators will be available for use to rivals alongside access to parts to the E190, of which Alliance is a local supplier.
Geoffrey McKell
says:Qantas monstering every sector of the aviation industry it can glutanise is not an appropriate nor fair way to develop diversity, jobs and third company development of the aviation industry, but to focus its aspirations towards monopolisation….which is exactly what Qantas want.
The ACCC need to be very wary of this myopic Qantas land grab. It is not in the best, long term interests of Australian aviation that it be allowed to asphyxiate robust, competitive competition.
Craig
says:The current majority owner of Alliance is quite happy to sell his airline to QANTAS.
The ownership will be a ‘paper transfer’, so no cash involved, as at the last information given.
Ashley
says:Suppose it’s in L K Hai’s interest to ‘beef up’ how good ZL is.
He should get down here to Oz, & talk to folk who prefer NOT to travel on his airline, & ask them the reasons’ why.
It’s well known what one reason is.
How often will ZL swap former Cobham aircraft to op normal scheduled flights, i/o ancient Saab’s?
Meanwhile, ZL is paying 100’s of 1000’s $ monthly to lease multiple types’ of aircrafts.
This cost has to paid head of wages’, fuel, engineering, & all the other ancillary costs’ of running an airline.
It’ll be interesting to read the 1HFY22 results come 31-12-2022.
Ashley
says:Suppose it’s in L K Hai’s interest to ‘beef up’ how good ZL is.
He should get down here to Oz, & talk to folk who prefer NOT to travel on his airline, & ask them the reasons’ why.
It’s well known what one reason is.
How often will ZL swap former Cobham aircraft to op normal scheduled flights, i/o ancient Saab’s?
Meanwhile, ZL is paying 100’s of 1000’s $ monthly to lease multiple types’ of aircrafts.
This cost has to paid ahead of wages’, fuel, engineering, & all the other ancillary costs’ of running an airline.
It’ll be interesting to read the 1HFY22 results come 31-12-2022.