Virgin Australia (VA, Brisbane International) is not interested in acquiring Rex - Regional Express (ZL, Wagga Wagga) due to the steep costs of the necessary renewal of the regional carrier's fleet, chief financial officer Race Strauss said at a CAPA event in Cairns.
"They’ve got a significant capital cliff that whoever takes that business needs to address. Now, looking at the numbers of that, that’s going to give an airline like us that applies a very disciplined framework an economic issue that’s not going to hit the hurdles," Strauss said.
He opined that Rex's general business model was very robust, and Virgin Australia would be interested in buying the carrier without the looming burden of the necessary fleet investment.
Rex's fleet tracked by ch-aviation comprises twenty-two Saab 340Bs (34.1 years old on average), thirty-five Saab 340B(Plus) (29.2 years old), and three Westwind 1124 business jets (44.6 years old). According to its website, the airline, including subsidiaries Pel-Air Aviation and Australian Airline Pilot Academy, also operates ten King Airs, sixteen Piper (single piston) Warriors, nine Piper (twin piston) Seminoles, and fifteen Cessna (single piston) aircraft.
Parent company Regional Express Holdings has been in administration for a year now, having buckled under the costs of an ill-fated attempt to enter the narrowbody market with a fleet of B737-800s. While the Australian government pledged to rescue the carrier as a last-resort buyer, should there be no other candidates, the administrators recently secured more time to find an investor.
