Is Rex Express Holdings going the begging bowl route again hoping the Australian Government will continue subsidizing its push to firmly establish itself in those commercially desirable major cities domestic-international air routes?

 

UPDATE: 

Sometime on the afternoon or evening of 30 July 2024 REX Express Holdings Limited appears to have informed the media it is going into "voluntary administration" - apparently before it notified the Australian Stock Exchange on which its shares are traded. 

It has made announcements of imminent doom in past years, ceased ticket sales, suspended flights or air routes when seeking a government bailout or an increase in monies received from a government industry funding scheme. 

Based on past behaviour receiving such financial assistance is no guarantee REX will not go ahead and abandon some regional airport destinations.

IMAGE: https://www.rex.com.au/flightinfo/network.aspx

Having built its Australian air routes by bullying regional councils & indulging in what looked suspiciously like corporate extortion at federal level, is the Singapore-based corporation operating REX Airlines, seeking yet another government bailout?

ABC News, 30 July 2024:

Rex Airlines' future uncertain in wake of ASX trading halt

Regional Australian airline Rex has suspended trading on the Australian stock market pending an upcoming announcement.

The ASX-listed company halted trade on Monday ahead of making an announcement dealing with a media report published over the weekend.

It is understood the announcement relates to a piece published in The Australian suggesting the airline has called in a turnaround team from consultants Deloitte.

The pause in trading is expected to remain in place until tomorrow or until Rex releases a statement to the market.

In a comment to the ABC, a spokesperson from Rex Airlines said the company was currently in an ASX trading halt "pending making a material announcement".

"In the meantime it isn't appropriate for us to make any further comments," the spokesperson said.

Transport Workers Union boss Michael Kaine said he had written to Rex as about 2,000 jobs were at risk.

"This is a sign that the aviation industry is broken, it's actually in crisis," he said.

"We're looking forward to hearing back from Rex as a matter of urgency, to try and get some more clarity on this situation.".

Government to 'work with' Rex

Asked whether the federal government would help keep Rex in the air if required, Prime Minister Anthony Albanese said it was "an important airline" and he was "very hopeful that they'll see their way through".

"We have sought information from the airline through [Minister for Transport] Catherine King, who came to see me about this today … we will continue to monitor what happens there," he said.

"There are a range of communities in New South Wales, in Queensland, in South Australia and right around the country that rely upon Rex … so it's important," he said.

The prime minister said the airline had come through COVID and received substantial government support, "and we will remain vigilant when it comes to this airline and continue to work with them".

"We want to see not just those jobs maintained, but we also want to see those communities continue to have access to aviation that's so important for their economy and for their way of life," he said.....

The Australian, 27 July 2024, p.25:

Rex calls in turnaround specialists

Stories abound of instability in the nation’s aviation sector. Budget airline Bonza fell into administration in April. The mooted listing of Virgin Australia keeps faltering, and now Qatar Airways wants to gobble up a strategically important part of it.

And what of Regional Express? Its executive chairman, Lim Kim Hai, was hot-swapped in June for deputy chair John Sharp, a former transport minister in the Howard government. Lim had served as executive chairman for 21 years, and aside from brief remarks issued by the company acknowledging his “extraordinary service”, no further reason was provided for this sudden and startling tweak to the board.

Seething, as you would expect, Lim went on to requisition a shareholders meeting to remove Sharp and three other directors from the board: Lee Thian Soo, Ronald Bartsch and Jim Davis. No reasons were provided for that development either.

This upheaval is taking place just as Rex finds itself in a spot of serious financial bother, so serious, it seems, that Margin Call hears that the airline has invited a turnaround team from Deloitte to rifle through its books and try to stop the proverbial plane from crashing into the mountain.

Leading that team are Sal Algeri and Richard Hughes, memorable for their role in the recovery of Virgin Australia after that airline slid into voluntary administration in 2020. Deloitte didn’t respond to questions about Rex and Rex itself declined to comment. “Given Rex is a public company, we do not respond to press or market rumours or speculation,” a spokesman said.

Rex’s troubles are not necessarily with its regional routes, which are said to be profitable, but with its expansion into the prized city destinations of Sydney, Melbourne and Brisbane, known in the industry as the Golden Triangle (a misnomer, by the way, the route connecting them forms no obvious triangle).

An expansion into those capital city markets began in 2020, its market share remains in the single digits, and the whole jolly has cost the business dearly. Deloitte’s partners are in a fever attempting a restructure solution as a rescue package. That too, we hear, is teetering towards failure.

Where to from here? Rex’s Golden Triangle dilemma could become intractable enough to push the airline into administration. Whether or not that occurs, the appearance of Deloitte’s clean-up team at least provides a plausible explanation for the airing of linen about to start in the boardroom.

After all, it was Sharp who said last year that profitability mattered more than market share, a remark made only after Rex posted a loss of $16.5m for the half to December 2022. Its latest results weren’t quite as fugly – a $3.2m loss for the half to December 2023....

AAP General News Wire, excerpt, 29 July 2024:

Rex reported a loss of $3.2 million for the first half of the 2023-24 financial year in February, compared with a $16.5 million loss in the prior period, saying escalating costs, particularly for fuel, made it hard to predict full-year profitability.....

The Australian, podcast, excerpt, 30 July 2024:

Anthony Albanese hails the importance of struggling Rex’s regional routes and promises to examine rescue packages, but questions the airline’s foray into competitive big city routes....

BACKGROUND

The Australian Stock Exchange 2024 announcement list re Regional Express Holdings Limited (REX) contained the following:

* 11.03.24 10:02.am ASX Release - REX announces partnership with UAE's national airline Etihad which entrenches REX passenger plane landing rights at Sydney and Melbourne airports as a connecting carrier of Eithad ticket holders.

* 06.06.24 8:33am Change to the Board - Deputy Chairman John Sharp ceases that board role & becomes Non-Executive Chairman. Kim Lim Hai ceases to be Non-Executive Chairman but remains a Non-Executive director & a significant shareholder in the company.

* 12.07.24 9:50am General Meeting of Members - Kim Lim Hai serves notice of a general meeting of members at which he will request the removal of six named directors as well as the majority of any directors that may have been appointed fron 5 May 2024 to the end of the general meeting.

* 29.07.24 9:50am Market Release - Pause in trade of Rex securities

* 29.07.24 10:17am Market Release - Trading Halt in Rex securities at own request until 31.07.24 and pending an announcement.

A LITTLE LOCAL BACKGROUND

North Coast Voices, 1 June 2022

Today REX Airlines began to abandon Northern Rivers regional airports - yet again

On 31 May 2022 Regional Express (REX) airlines confirmed that it was withdrawing airline services from Lismore and Grafton on 1 June 2022 and from Ballina on 2 July 2022.

At the same time it announced cessation of service to Kangarooo Island.

Very predictably this withdrawal again - as it has so often in the past - coincided with the cessation of federal government funding which heavily subsidizes REX.

The phrase 'shakedown merchant' comes to mind.

Today REX Airlines began to abandon Northern Rivers regional airports - yet again

 

On 31 May 2022 Regional Express (REX) airlines confirmed that it was withdrawing airline services from Lismore and Grafton on 1 June 2022 and from Ballina on 2 July 2022.

At the same time it announced cessation of service to Kangarooo Island.

Very predictably this withdrawal again - as it has so often in the past - coincided with the cessation of federal government funding which heavily subsidizes REX.

The phrase 'shakedown merchant' comes to mind.

REX Airlines Sydney-Grafton-Lismore route to remain open until September 2021?

 

It would seem that the Clarence Valley’s only airport at Grafton may have received a temporary reprieve.

On 22 February 2021 Regional Express Airlines (REX) announced for a second time in a little over eight months that it would be abandoning its passenger service into Grafton Airport, this time commencing 23 March 2021.

Again leaving the Clarence Valley without a passenger airline service.

Now that Lismore City and Clarence Valley Councils have been successful in getting an extension of the Regional Aviation Network Support program for the next six months - alas not the twelve months they lobbied for - it is expected that REX will continue to fly the Sydney-Grafton-Lismore route.

However, REX is yet to issue a media release confirming that it has altered its plans to abandon its passenger service to Grafton on 23 March.

Given the airline's established modus operandi I would not be surprised to learn that it is approaching both local governments to see if it can squeeze more airport fee or other concessions from them before it commits to flying in for another six months.

REX Regional Express Airlines walks away from its Clarence Valley airline route for a second time, yet again trying to blame others for its decision

“Rex will stand by all regional communities that have stood by Rex during this global and national crisis” [Rex Express Holdings Deputy Chairman and former Nationals MP for Hume, the Hon John Sharp AM, company media release, 29 April 2020]

Stirring words in that quote at the top of this post, however the reality was somewhat different for two regional communities on the NSW North Coast - Clarence Valley and Lismore City.

Lismore Airport services a city and population on the banks of the Wilsons River and is a gateway for both business travel and holidaymakers.

While Grafton Airport in the Clarence Valley is predominately used by state authorities and local government.

Having received financial assistance from Clarence Valley Council as well as nearly $24 million from the federal government’s $198 million Regional Airline Network Support Program (RANS), $53.9 million from the $100 million COVID-19 Regional Airlines Funding Assistance Program (RAFA), Jobkeeper workforce wage subsidies, and  unspecified funding through Australian Airline Financial Relief Package (AAFRP), Regional Express Airlines (REX) suddenly decided to cease flights into Grafton Airport on 3 July 2020.

Apparently it had decided it wished to expand its presence on other routes where it could compete with a pandemic-weakened Qantas Airlines.

It reversed its decision to abandon Grafton Airport in August 2020 – promising to operate return services three days a week, on Monday, Wednesday and Friday on a Sydney-Grafton Lismore route commencing 17 August 2020. 

Coincidentally REX's re-entry followed on the heels of negative publicity and media reports that Clarence Valley Council had begun looking for another airline to take its place.

Now seven months after its return, the predominately foreign-owned REX is withdrawing from its Sydney-Grafton-Lismore route as of 23 March 2021.

This time all but admitting that having milked the federal government for as much funding as it could, it was again abandoning both Grafton and Lismore just days ahead of the cessation of the emergency regional airline funding streams it had previously accessed.

In a media release dated 22 February 2021 REX stated:

Rex will, from April, commence new services to ports where Virgin Australia has retreated, leaving Qantas as the sole or dominant operator. The new services are from Sydney to:

 Coffs Harbour (330,000 passengers pre-COVID)

 Port Macquarie (190,000 passengers pre-COVID)

and will be available for sale from tomorrow.”

“Other routes under active consideration where Qantas is the sole or dominant carrier include:

 Sydney - Tamworth (175,000 passengers pre-COVID),

 Perth - Geraldton (110,000 passengers pre-COVID),

 Melbourne - Devonport (146,000 passengers pre-COVID), and

 Sydney - Canberra (930,000 passengers pre-COVID).”

“We will be launching services to these cities once a partnership agreement is concluded with the local councils or airport owners.”

“Our plans to commence domestic jet services on the Sydney-Melbourne route on 1 March are still firm barring further border closures.”

In another media release dated 1 March 2021 REX stated:

Adelaide and the Gold Coast as they have been chosen by Rex to receive domestic jet services just in time for the Easter rush.

Rex today announces that it will commence new services between Melbourne and Adelaide from 31 March, whilst the Gold Coast will receive services from Melbourne commencing 29 March and from Sydney commencing 1 April 2021…..

“I wish to thank both Adelaide Airport and the Gold Coast Airport who have worked tirelessly with us to make this happen in such a short time frame.”

One has to wonder how long the honeymoon will last for Coffs Harbour, Port Macquarie and Gold Coast airports and, whether airport managements realise just how many times REX will seek financial concessions from local government to keep flying these routes.

In the Clarence Valley the honeymoon is long over and personally I'm hoping we have finally seen the last of REX.

BACKGROUND

According to Regional Express Airline’s 2019-20 Annual Report its largest shareholders are:

MR KIM HAI LIM with18,998,346 fully paid ordinary shares – 17.25% of total shares issued

BNP PARIBAS NOMINEES PTY LTD with 16,234,094 fully paid ordinary shares – 14.74% of total shares issued

THIAN SOO LEE with 7,722,181 fully paid ordinary shares – 7.01% of total shares issued

JOO CHYE CHUA with 7,454,362 fully paid ordinary shares – 6.77% of total shares issued

MING YEW SEE TOH & HUI ING TJOA with 7,454,362 fully paid ordinary shares – 6.77% of total shares issued

MS HUI LING TJOA with 5,755,513 fully paid ordinary shares – 5.22% of total shares issues.

Around the Northern Rivers in December 2020

 

~~~~~~~~~~~~~~~~~~~~~

On 7 December 2020 Development Application SUB2020/0038 (Lot 104 DP 751388) lodged by Robert Donges (a former Maclean and Clarence Valley council officer) on behalf of Kahuna No. 1 Pty Ltd was withdrawn while still within the Clarence Valley Council public exhibition period.

The development application included 336 residential lots, four drainage reserves, one commercial lot and one public reserve in what is essentially a high density configuration along James Creek Rd, James Creek.

IMAGE: Clarence Valley Independent

Withdrawal was hardly surprising given the lack of transport and other infrastructure which would be needed to be in place for a potential village-sized population of at least 840 people, as well as storm water and environmental concerns.

The owner of this lot has submitted a request to Clarence Valley Council that the unspent portion of application fees which it sets at $20,000. As council policy will only allow return of up to 50 per cent of an application fee (being $11,415.00 in this case) the matter is going to council’s ordinary monthly meeting on 15 December 2020.

~~~~~~~~~~~~~~~~~~~~~

In August 2020 Maclean High School announced it was starting a cattle and livestock showing team, under the guidance of Primary Industries Teacher, Christopher Kirkland. Last month Maclean students took part in the Northern Schools Prime Steer Show at Glen Innes, NSW. I'm sure that experience will set them up for success in 2021.

Maclean High School – Cattle and Livestock Showing Team 2020

IMAGE: Clarence Valley Independent

~~~~~~~~~~~~~~~~~~~~~

The Maclean Agricultural Show was cancelled in 2020 due to the Covid-19 pandemic. However, the Maclean Show Society will be given $10,000 from the federal government towards its 2021 show to held on 20 to 21 April next year. The Clarence Pastoral & Agricultural Society Ltd will receive $17,682.68 towards its 2021 agricultural show.

~~~~~~~~~~~~~~~~~~~~~

From 1 March 2021 Clarence Valley travellers will be able to connect through to Melbourne as part of Regional Express’ expansion on the back of the collapse of other regional airlines due to the COVID-19 pandemic’ From March Rex will begin flying nine return flights from Sydney to Melbourne and travellers boarding from Grafton Airport will be able to connect straight through, with baggage checked to their destination.

~~~~~~~~~~~~~~~~~~~~~

Yaegl woman Pauline Clague has been awarded this year’s $20,000 Natalie Miller Fellowship. She is the 9th recipient of this fellowship and the first Indigenous person. 

The Natalie Miller Fellowship (NMF) supports the professional leadership of aspirational women in all sectors of the Australian screen industry; developing further skills, knowledge and connections through fellowships and programs. Its vision is to achieve gender diversity in screen leadership, resulting in a greater breadth of storytelling, better company performances, innovation, and a more dynamic, inclusive and robust industry for everyone.

Well-known as a producer of documentaries and short stories, Pauline has at least 16 films to her credit.

~~~~~~~~~~~~~~~~~~~~~

It appears that Lismore City Council and Rous County Council wrote to the NSW Berejiklian Government encouraging the development of a $220 million 50 giglitre second dam on Rocky Creek to the south-west of the existing dam, before the dam proposal went to puclic exhibition for community input. Many local residents are not amused by this discovery. The proposed dam is supposed to supply four local government areas.

IMAGE: https://rous.myglobe.app/bulk-water

~~~~~~~~~~~~~~~~~~~~~

Clarence Valley Independent, 9 December 2020:

Greg Clancy: “…if [mining companies] spend millions on exploration then they expect [to mine] … we need to speak out strongly against all mining proposals.”

Andrew Baker: “…to turn our back on any potential mining at this stage is doing the community a disservice.

“We should, rather than just accept there are concerned people in the community … we should be fully informed before making these decisions.

“…we should find out where council and councillors fit within our sphere of influence and not give people false hope that we can extinguish mining licences.”

Arthur Lysaught: “I think it was three years ago when Greg gave me the Greens [position] … but I said at the time, if I ever thought someone would affect the river, I would stand beside him to preserve the most pristine river in the country, maybe the world.

“The unfortunate part of this; whatever stance we take, others make the decision.”

Peter Ellem: “Yes and the greed merchants will continue to have a crack, whether to harvest dam water or reopen a mining industry through exploration.

“The end result is they want to mine … and with the government supporting one company [with an exploration grant], we have to be ever watchful to protect our river catchment and [associated] industries [like] tourism and recreation.

“…just like damming the Clarence and CSG mining, this kind of mining is not appropriate here and there should be a moratorium.”

Karen Toms: “We have an amazing river … but I am concerned because I heard what our state MP [Chris Gulaptis] has said.

“The general manager is right, we need to have a position … but 10,000 signatures … well done to the community to start rallying.

“We are here to represent our people … we are the responsible authority for our water so we do have some skin in the game.

“Tell them [mining companies] … to bugger off.

“It’s important send a strong message to the state and federal governments and the miners: leave our water alone.”

Deborah Novak: “A lot of people out there are scared to step up … but this is where they have come together [to gather 10,000 signatures].

“It’s important for the state and federal governments to see that the [petition organisers] are professional … and really amazing and it’s the young people who have stepped up.”

Greg Clancy (right of reply): “Over 10,000 signatures suggest that this is not only the concerns of a few people.

“…despite covid, the groups have worked very hard; I commend the Clarence Catchment Alliance and the Clarence Environment Centre … all working hard on this issue to make the general public aware.

“…it’s scientific, it’s facts about what we know mining does to river systems.

“We only need one accident and there goes the entire river.

“It’s not a case of not having mining anywhere, but it has to be in areas of minimal impact.”

~~~~~~~~~~~~~~~~~~~~~

Echo Net Daily, December 2020:

Lismore MP Janelle Saffin has blown the whistle on the government after obtaining a ‘damning’ NSW Department of Education School Profile of Murwillumbah High School, the proposed site of the mega campus, which shows major capital works are badly needed there.

Making cost savings by shelving replacement or maintenance of buildings at four public schools appears to be the main driver of the NSW government’s agenda for its mega Murwillumbah Education Campus, says Ms Saffin.

These four public schools – Murwillumbah High, Wollumbin High, Murwillumbah East Public and Murwillumbah Public – all have their own well-established traditions of academic, sporting and cultural excellence,’ Ms Saffin said.

Ms Saffin has invited NSW Education Minister Sarah Mitchell MLC to come to Murwillumbah early next year to meet with the four Parents & Citizens Associations and other representatives of students, teachers and staff, and the local community.

‘Our school communities deserve to hear from Minister Mitchell what the evidence-based educational benefits to Murwillumbah’s primary and secondary school students are of the government’s plan to merge them into one “mega” campus by 2024.

‘However, the evidence is mounting that the Department has dragged the chain on capital works and maintenance at Murwillumbah High and Murwillumbah East Public School, badly affected by the 2017 floods, and the Department’s fix is to close four schools and replace them with a centralised American model.’……

~~~~~~~~~~~~~~~~~~~~~

REX Regional Express airline announces reinstatement of passenger service to Grafton NSW - accompanied by a thinly veiled threat aimed at the people of the Clarence Valley

Rex Regional Express Airlines, media release excerpts, 6 August 2020:

Rex to Resume Flights to Grafton

Regional Express (Rex) announces today that it will resume flights to Grafton with effect from Monday, August 17, 2020.

Rex notified the Clarence Valley Council of the withdrawal of services on June 4 2020,….

Upon the intervention of the Member for Page, Mr Kevin Hogan, Rex accepted the apologies of the council and accepted Mr Hogan’s assurance that the remarks of the said councillor were condemned by the vast majority of the community.

Rex will operate return services three days a week, on Monday, Wednesday and Friday.

Rex Deputy Chairman, the Hon John Sharp AM, said, “Although Rex has always taken the view that elected representatives speak on behalf of the community, Rex is giving the benefit of the doubt to the community of Grafton and is accepting at face value the assurance from the Federal Member for Page. Rex will be watching the developments at Grafton closely.”

Mr Hogan said, “I am extremely pleased that Rex have reconsidered and are now reinstating this important service for our community.”

“I have continued to work with Rex, Clarence Valley Council and the Deputy Prime Minister to resolve this issue.”

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the resumption of REX flights to Grafton was a step in the right direction for the industry….

“The reintroduction of the flight from Sydney to Grafton is a great step forward for the region to reboot the economy in what has been a difficult year for everyone.”

Clarence Valley Council Mayor Jim Simmons welcomed the announcement and restated the importance of this service.

“I would like to personally thank Kevin Hogan for continuing to advocate for this important community service,” Cr Simmons said.

“Flights into Grafton are vitally important for our local economy and connects our region to major population centres.

[my yellow highlighting]

When Rex commences flying into Grafton Airport again it will have been absent from the Clarence Valley for 39 days since 3 July.

Coincidentally Rex's re-entry follows on the heels of media reports that Clarence Valley Council had begun looking for another airline to take its place.

It certainly hasn't escaped North Coast Voices' notice that REX shares stopped climbing in July and the volume of shares traded also fell.

Perhaps this airline's bully boy tactics have not instilled confidence in the market place. Just as going straight to the Murdoch media by way of email copy to The Daily Examiner before Clarence Valley Council had time to consider the email's contents failed to impress more than a few people in the Clarence Valley.

ASX Chart, 8 August 2020