REX: Shareholders approve capital raising

Back in 2020, at the height of the Pandemic, REX announced it was planning on expanding into domestic operations from its regional network base. Instead of just flying from regional centres into capital cities, it was going to start to fly between capital cities. This would make it the third, or fourth player in the domestic market, depending on whether you count Qantas and Jetstar as part of the same group, or as separate airlines.

Background

So in 2020 while most of the airlines around the world were substantially grounded, sending their planes off to be stored in the desert, and retrenching pilots and trolley dollies, left, right and centre, REX thought it would be a good idea to lease planes, recruit pilots and plan a dramatic expansion.

It was a more sensible move if you add-in how cheap plane leases were then, and that REX had just secured a sizeable (AU$54 million – I think) subsidy from the Australian government to keep its regional network operational. Add to that the demise of Tiger Airways from domestic competition as Virgin Australia was put into administration and thence to the auction block.

REX Funding

Rex also successfully negotiated an investment deal with Asian partner PAG Regulus Holdings P/L for AU$150 million to fund their planned expansion of operations. REX gets access to the first AU$50 million in the next fortnight, a couple more weeks before it launches its first domestic Sydney/Melbourne route.

Last Friday (29 January 2021) saw shareholders approve the deal.

“This is the final major step in Rex’s preparation for launching domestic services to all the major cities. It’s a historic moment for Rex and for Australian aviation, providing Australians for the first time a premium reliable service at affordable fares.”

John Sharp, Rex Deputy Chairman

REX readiness

The airline is well on the way to its 1 March launch, having secured its High Capacity Air Operator’s Certificate for the fleet of 6 ex-Virgin Australia Boeing 737-800NG aircraft, which are being repainted and gussied up with Rex livery. Those purple perspex dividers between economy and business – along with the ‘Virgin’ embossing on the seats presumably will have to go. REX already has the pilots recruited along with cabin crew.

Interior and uniforms

If the photograph below is any indication, we are going to see a continuation of the orange and blue logo colours in cabin staff uniforms, but with an interior grey and orange/yellow theme with the REX logo embossed on the head rests of the seats.

2PAXfly Takeout

This is another timely reminder to wear your seatbelt when seated. Holding you close to your seat will protect you from the sort of injuries sustained on this flight, when unsecured passengers flew to the ceiling of the aircraft, and then came crashing down once the ‘drop’ ceased.

The hope will be that this is an anomaly – a ‘freak accident’ in casual parlance. If it is a systemic error either mechanical or electronic, then this is a larger concern for the airlines that fly Boeing Dreamliner 787 aircraft. Let’s hope it isn’t. If it is, it will pile on the woes to Boeing’s existing stack.

REX has already marketed 100,000 AU$79 fares for the Sydney/Melbourne service as a launch promotion.

If you want to read more and see a price comparison between airlines for the route, head over to the post on competition on the Sydney/Melbourne market from March 1st.

Did I mention that I’m booked on one of the first days flights?