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Rex begs Deputy PM for sovereign guarantee

Isochronous

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Regional Express has warned it could be "irreversibly destroyed" unless the government takes emergency measures to ensure its viability during the coronavirus pandemic.
Rex chief operating officer Neville Howell said the airline could fold within six months, and would need to announce "drastic schedule reductions" and drop some routes altogether to buy them some more time.



In a strongly worded letter to Riverina MP and Deputy Prime Minister Michael McCormack, Mr Howell begged him to waive a range of fees and charges for one year to help them weather the storm. His demands include scrapping the "grossly unfair" fuel levy, waiving all air service charges, and suspending baggage security costs at regional terminals.
On top of waiving fees, Mr Howell is demanding the federal government provide a sovereign guarantee for any new loans so that banks will be willing to lend them money to tide them over.

"Rex calls on the leader of the National Party to immediately take vigorous, swift and unprecedented actions," Mr Howell said.
"If regional carriers collapse, so will many regional communities for which the air service is their lifeline."
While Rex anxiously awaits a response from the government they have placed a trading halt on their shares, freezing them until Thursday pending further announcements down the line.
Rex currently services regional centres including Albury, Wagga and Griffith with flights to metropolitan centres such as Sydney and Melbourne.

Mr McCormack has made no promises, but said the government was "looking at" the suggestions put forward by the airline and would arrive at a decision in the coming days.
"The airlines are facing difficulties, but they tell me they're OK at the moment," Mr McCormack said.
"We'll keep looking at what we can do as a government to help our airlines."
Mr McCormack said Rex, Qantas, and Virgin were feeling the brunt of the coronavirus pandemic, with plummeting passenger numbers across the board.

The CAPA Centre for Aviation's recent report predicts most airlines will be bankrupt by May, with many airlines already being driven into technical bankruptcy.
 

Catweazle

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And I was hoping to fly with then in April... A shame really, because Rex has quite the socio-cultural history behind it, rather like QF.
 

samh004

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The troublesome thing I see here is that if this crisis has brought them to the edge so quickly, perhaps they're not in a very good financial position at all and it'll just be money thrown down the drain when/if they later fail. Plus, they're flying around on an ageing fleet with potentially no hope of fleet renewal, so will they come knocking for help with that in the future too?

That said, they're probably more deserving than the 90% foreign owned Virgin Australia. I read somewhere that the government might help VA stay afloat so Australia doesn't end up back in an airline monopoly – and while I agree a monopoly would suck for air travel prices when this is all over, why don't they also bail out Cathay Pacific and Malaysia Airlines under that logic. Being 90% foreign owned I can't see why VA would be more deserving of government help than Rex or Qantas!
 

Must...Fly!

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Being 90% foreign owned I can't see why VA would be more deserving of government help than Rex or Qantas!
If the appetite was really there, I wonder if HNA could be tempted to part with their stake and be rid of it for a token sum.

Government gives VA money to survive, shares held in trust with some sale conditions.

Pipe dream stuff but just thinking out aloud.
 

samh004

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If the appetite was really there, I wonder if HNA could be tempted to part with their stake and be rid of it for a token sum.

Government gives VA money to survive, shares held in trust with some sale conditions.

Pipe dream stuff but just thinking out aloud.
Better than becoming just one of a long line of suitors who have poured money into VA and not expected to see a result. Although admittedly, I imagine most do it to blunt Qantas, and I'm not sure what reason the government would have for doing that.
 

moa999

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, they're probably more deserving than the 90% foreign owned Virgin Australia.
Rex has a very high Singapore foreign ownership.
By some very politically connected individuals.

While much like the RBA supported the banks today the government should provide some assistance, if it's more than that they should be taking equity
 

dajop

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The troublesome thing I see here is that if this crisis has brought them to the edge so quickly, perhaps they're not in a very good financial position at all and it'll just be money thrown down the drain when/if they later fail. Plus, they're flying around on an ageing fleet with potentially no hope of fleet renewal, so will they come knocking for help with that in the future too?
In their most recent public letter to the states, they indicated they had 6 months reserves without further deterioration. That's probably better than many carriers, big and small. But they also suggested other regional carriers probably are not in this position - perhaps one or more of Fly Corporate (also a Saab operator), AirNorth, FlyPelican, Sharp Airlines and Skippers Aviation may be in a more difficult position. Who knows?
 

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