1 00:00:00,400 --> 00:00:03,880 Speaker 1: Welcome to Fear and Greed Sunday feature Michael Thompson. It 2 00:00:03,920 --> 00:00:07,040 Speaker 1: was a pretty fascinating week in the aviation industry. The 3 00:00:07,080 --> 00:00:11,200 Speaker 1: annual Skytracks Awards, which are kind of considered the Oscars 4 00:00:11,360 --> 00:00:15,280 Speaker 1: of the aviation world, I suppose, named Katar Airways as 5 00:00:15,320 --> 00:00:20,840 Speaker 1: the world's best airline. Quantus, however, slipped from seventeenth to 6 00:00:20,960 --> 00:00:24,119 Speaker 1: twenty fourth, it's worst ranking more than a decade. But 7 00:00:24,160 --> 00:00:26,920 Speaker 1: that was a bit of good news for another Ossie airline, Rex, 8 00:00:26,960 --> 00:00:30,360 Speaker 1: which was the only Australian group to actually climb in 9 00:00:30,400 --> 00:00:33,280 Speaker 1: the rankings. And it reminded me of the interview that 10 00:00:33,280 --> 00:00:35,960 Speaker 1: Sean Aylmer did with John sharp back in March of 11 00:00:36,040 --> 00:00:39,279 Speaker 1: twenty twenty one. The honorable John sharp Am was at 12 00:00:39,280 --> 00:00:42,680 Speaker 1: the time the deputy chair of the Rex group. He's 13 00:00:42,760 --> 00:00:46,520 Speaker 1: now the chair and he really got stuck in during 14 00:00:46,520 --> 00:00:48,920 Speaker 1: this interview because this was a time when the industry 15 00:00:49,560 --> 00:00:54,160 Speaker 1: was changing significantly, with Rex stepping up their operations from 16 00:00:54,200 --> 00:00:58,040 Speaker 1: regional flights to having seven three sevens flying the Golden Triangle, 17 00:00:58,080 --> 00:01:02,520 Speaker 1: the Sydney Melbourne Brisbane routes that had been dominated by 18 00:01:02,720 --> 00:01:06,360 Speaker 1: Quantus and by Virgin and he accused Quantus of acting 19 00:01:06,440 --> 00:01:10,960 Speaker 1: like a bully for retaliating by moving into Rex's regional roots. 20 00:01:11,080 --> 00:01:13,880 Speaker 1: It is a terrific chat. I hope you enjoy it. 21 00:01:18,600 --> 00:01:22,000 Speaker 2: There are big things happening in the aviation industry in Australia. 22 00:01:22,319 --> 00:01:25,759 Speaker 2: The last twelve months have seen massive job cuts at Quantis, 23 00:01:26,080 --> 00:01:28,680 Speaker 2: the rebirth of Virgin, and now the emergence of a 24 00:01:28,800 --> 00:01:31,839 Speaker 2: new player on one of the busiest, most competitive roots 25 00:01:31,840 --> 00:01:34,639 Speaker 2: in the world. But the new player flying between Sydney 26 00:01:34,640 --> 00:01:38,280 Speaker 2: and Melbourne, is hardly new to the industry. Regional Express 27 00:01:38,440 --> 00:01:41,640 Speaker 2: or REX is better known for servicing regional Australia with 28 00:01:41,680 --> 00:01:45,080 Speaker 2: small aircraft, but the airline has expanded its fleet and 29 00:01:45,160 --> 00:01:47,880 Speaker 2: now has four seven three seven jets, with another two 30 00:01:47,880 --> 00:01:50,120 Speaker 2: on the way and more aircraft and more cities to 31 00:01:50,160 --> 00:01:52,960 Speaker 2: be added in coming months. It's a move that's changing 32 00:01:53,000 --> 00:01:56,560 Speaker 2: the aviation landscape in Australia with the golden triangle that 33 00:01:56,680 --> 00:02:00,360 Speaker 2: Sydney Melbourne Risbone, previously dominated by Quantus and vs Urgent 34 00:02:00,560 --> 00:02:04,400 Speaker 2: in their budget subsidiaries. The Honorable John sharp Am is 35 00:02:04,440 --> 00:02:07,280 Speaker 2: the Deputy chair of the REX Group. John, Welcome to 36 00:02:07,320 --> 00:02:10,880 Speaker 2: Fear and Greed. Good morning, Sean Erstley. You're a pilot yourself. 37 00:02:10,919 --> 00:02:12,680 Speaker 2: I believe, is that right? Maybe you can tell us 38 00:02:12,680 --> 00:02:13,440 Speaker 2: the Rex story. 39 00:02:13,840 --> 00:02:16,160 Speaker 3: Well, I am a pilot. I'm a fixed wing and 40 00:02:16,240 --> 00:02:19,720 Speaker 3: a rotary wing pilot. So helicopter pilot learned to fly 41 00:02:19,840 --> 00:02:22,000 Speaker 3: at fixed wing when I was in my early twenties, 42 00:02:22,000 --> 00:02:25,080 Speaker 3: and a rotary wing about twenty years after that. And 43 00:02:25,120 --> 00:02:28,080 Speaker 3: I've also been on the board of what was then 44 00:02:28,120 --> 00:02:31,160 Speaker 3: the largest helicopter manufacturer in the world, Eurocopter that's now 45 00:02:31,200 --> 00:02:34,520 Speaker 3: part of it Airbus Group. But the Rex story is 46 00:02:34,600 --> 00:02:38,040 Speaker 3: one that goes back nearly seventy years Sean. It starts 47 00:02:38,080 --> 00:02:42,720 Speaker 3: with Max Hazelton in nineteen fifty three. Max comes from 48 00:02:42,919 --> 00:02:45,280 Speaker 3: q'ed Al, which is near Orange and central West New 49 00:02:45,280 --> 00:02:48,560 Speaker 3: South Wales, and Max persuaded his mother to lend him 50 00:02:48,560 --> 00:02:52,200 Speaker 3: some money to buy an Ostar single engine aeroplane, and 51 00:02:52,240 --> 00:02:55,560 Speaker 3: he commenced in what you'd basically describe as charter and 52 00:02:55,639 --> 00:03:02,799 Speaker 3: agricultural aviation operations. Max grew that business into a substantial 53 00:03:03,040 --> 00:03:08,400 Speaker 3: regional airline, and Rex started with Hazelton Airlines. And in 54 00:03:08,520 --> 00:03:12,880 Speaker 3: nineteen sixty four in Warga, a chap called Don Kendall 55 00:03:12,960 --> 00:03:16,520 Speaker 3: started an airline which he called Kendall's Airline that didn't 56 00:03:16,560 --> 00:03:18,639 Speaker 3: think much about the name of the airline, and he 57 00:03:18,720 --> 00:03:20,959 Speaker 3: called it Kendel Airline, just like Max call it his airline, 58 00:03:21,000 --> 00:03:25,840 Speaker 3: Hazelan Airlines, and he started once again a very successful 59 00:03:25,960 --> 00:03:30,680 Speaker 3: regional airline operation. Both of those airlines were bought by Ansett, 60 00:03:30,840 --> 00:03:34,920 Speaker 3: and they were then obviously caught up in the collapse 61 00:03:34,920 --> 00:03:39,360 Speaker 3: of Ansett. The administrator's called a mentha put both airlines, 62 00:03:39,400 --> 00:03:42,600 Speaker 3: Regional Airlines, hazel and Kendall up for sale. A fellow 63 00:03:42,640 --> 00:03:46,920 Speaker 3: called Michael Jones raised about thirty four million dollars in 64 00:03:46,960 --> 00:03:50,680 Speaker 3: capital and bought both Hazelan and Kendall merged them into 65 00:03:50,680 --> 00:03:54,280 Speaker 3: what we now call REX or Regional Express, and Regional 66 00:03:54,360 --> 00:03:59,840 Speaker 3: Express's life began under that banner in two thousand and one, 67 00:04:00,160 --> 00:04:02,600 Speaker 3: and in two thousand and four we listed the company. 68 00:04:03,480 --> 00:04:06,600 Speaker 3: Since then, we've more than doubled the size of the network, 69 00:04:06,640 --> 00:04:08,880 Speaker 3: the number of passengers, the number of people employed in 70 00:04:08,920 --> 00:04:13,240 Speaker 3: the company. We have always been profitable from the day 71 00:04:13,320 --> 00:04:16,280 Speaker 3: the current management took over, which is after the first 72 00:04:16,360 --> 00:04:19,400 Speaker 3: year of its operation, because Michael Jones, interestingly enough, Sewan 73 00:04:20,040 --> 00:04:22,520 Speaker 3: sent REX broke in his first year of operating it 74 00:04:22,720 --> 00:04:25,560 Speaker 3: and the airline was about to close down, and so 75 00:04:26,240 --> 00:04:30,080 Speaker 3: the current chairman Nim Kim High, who was an investor 76 00:04:30,360 --> 00:04:34,520 Speaker 3: in the first a version of Rex, decided to rescue it, 77 00:04:34,560 --> 00:04:36,240 Speaker 3: put a lot more of his own cash into it, 78 00:04:36,640 --> 00:04:38,680 Speaker 3: and took over the running of it. He got rid 79 00:04:38,760 --> 00:04:40,400 Speaker 3: of all the people who are running Rex at the 80 00:04:40,440 --> 00:04:42,919 Speaker 3: time after the first twelve months of failure, and he 81 00:04:42,920 --> 00:04:45,159 Speaker 3: got rid of them because he said, at the time, 82 00:04:45,200 --> 00:04:46,920 Speaker 3: they obviously don't know how to run an airline. And 83 00:04:46,920 --> 00:04:49,720 Speaker 3: his good friend pointed out to him as neither is 84 00:04:49,800 --> 00:04:53,480 Speaker 3: Kim High. But he took over the running of the airline. 85 00:04:53,480 --> 00:04:57,279 Speaker 3: And he's a successful businessman who comes from Singapore, educated 86 00:04:57,279 --> 00:05:00,960 Speaker 3: in France at the two best universities in France, and 87 00:05:01,000 --> 00:05:04,159 Speaker 3: then did an MBA and Singapore University, and then developed 88 00:05:04,160 --> 00:05:07,360 Speaker 3: his own business. And so the airline since then has 89 00:05:07,440 --> 00:05:12,320 Speaker 3: operated profitably. And we arrived at the pandemic last year 90 00:05:12,880 --> 00:05:15,400 Speaker 3: with no debt and a reputation for profit. 91 00:05:15,480 --> 00:05:17,640 Speaker 2: And just before we get onto the pandemic, I think 92 00:05:17,680 --> 00:05:19,640 Speaker 2: it's really important that the I mean I grew up 93 00:05:19,680 --> 00:05:21,479 Speaker 2: in Orange and I knew the Hazelton's, and indeed I 94 00:05:21,520 --> 00:05:24,039 Speaker 2: met Max a few times many years ago. But it 95 00:05:24,120 --> 00:05:26,120 Speaker 2: was sort of the life part of those regional towns 96 00:05:26,160 --> 00:05:28,120 Speaker 2: to get to the city because you were at you 97 00:05:28,120 --> 00:05:30,400 Speaker 2: could drive four hours from Orange. But if you had 98 00:05:30,440 --> 00:05:32,600 Speaker 2: to be there or you need to go down for 99 00:05:32,640 --> 00:05:35,040 Speaker 2: a very short period, a lot of these regional towns 100 00:05:35,279 --> 00:05:39,120 Speaker 2: totally relied on Hazelton's or Kendall's and nowadays on Reck. 101 00:05:39,200 --> 00:05:40,960 Speaker 2: So I think kind of people that live in the 102 00:05:41,000 --> 00:05:44,160 Speaker 2: city forget just how important those routes are. 103 00:05:44,320 --> 00:05:46,120 Speaker 3: Well, absolutely right, Sean. I mean, if you live in 104 00:05:46,240 --> 00:05:50,960 Speaker 3: regional Australia, the tyranny of distance is a huge disabling 105 00:05:51,360 --> 00:05:56,560 Speaker 3: effect on you, your social life, your business life, and 106 00:05:57,040 --> 00:06:02,200 Speaker 3: even your administrative life and your medical life. These days, 107 00:06:02,440 --> 00:06:05,760 Speaker 3: you know, everything centralized into the major capital cities, and 108 00:06:05,800 --> 00:06:08,520 Speaker 3: in order to access those services, be they medical in 109 00:06:09,160 --> 00:06:12,960 Speaker 3: the expensive technical equipment that hospitals have and doctors have, 110 00:06:13,800 --> 00:06:16,599 Speaker 3: you've got to go to the capital cities, or alternately, 111 00:06:16,640 --> 00:06:18,599 Speaker 3: the specialists have got to go out to the regions 112 00:06:18,600 --> 00:06:22,600 Speaker 3: to provide a service into places like Orange, you know, Dubbo, Wagga, 113 00:06:23,120 --> 00:06:27,360 Speaker 3: Aubry and so forth and Griffith. So you know, they're 114 00:06:27,440 --> 00:06:29,720 Speaker 3: really an essential part of the infrastructure. I mean, if 115 00:06:29,760 --> 00:06:32,520 Speaker 3: you live in Broken Hill, you know it's a sixteen 116 00:06:32,560 --> 00:06:34,880 Speaker 3: hour drive to Sydney. That's your capital city in the state, 117 00:06:35,440 --> 00:06:37,599 Speaker 3: sixteen hours in the car. If you're not well and 118 00:06:37,640 --> 00:06:41,479 Speaker 3: you're going to Sydney for some hospital admission or some 119 00:06:41,839 --> 00:06:45,200 Speaker 3: specialist treatment, sixteen hours in the car is just too 120 00:06:45,279 --> 00:06:48,760 Speaker 3: much and hence the airline service is essential. I mean 121 00:06:49,040 --> 00:06:52,520 Speaker 3: just basic little things like pathology tests. I mean there's 122 00:06:52,520 --> 00:06:56,240 Speaker 3: no big pathology laboratory in Broken Hill, so all the 123 00:06:56,240 --> 00:06:59,640 Speaker 3: pathology tests that the doctors the GPS do in Broken 124 00:06:59,720 --> 00:07:02,320 Speaker 3: Hill all go on the REX flight down to Adelaide 125 00:07:02,400 --> 00:07:05,520 Speaker 3: or Sydney to be tested and then the results will 126 00:07:05,560 --> 00:07:09,920 Speaker 3: be sent back. But without that airline service, it's almost 127 00:07:10,000 --> 00:07:12,720 Speaker 3: impossible to do those things. So you know, they are 128 00:07:12,800 --> 00:07:17,200 Speaker 3: an absolutely essential service for people and the best way 129 00:07:17,240 --> 00:07:20,800 Speaker 3: you can overcome the tyranny of distance in regional Australia 130 00:07:20,880 --> 00:07:25,679 Speaker 3: is to have very good, reliable, frequent and affordable safe 131 00:07:26,000 --> 00:07:28,760 Speaker 3: regional airline services so that you can do business. If 132 00:07:28,800 --> 00:07:32,120 Speaker 3: you're living in Wogga and you need to do business 133 00:07:32,120 --> 00:07:34,560 Speaker 3: in Sydney, I mean REX provides you with a service 134 00:07:34,600 --> 00:07:36,520 Speaker 3: that gets you down from Wagga to Sydney by nine 135 00:07:36,520 --> 00:07:38,320 Speaker 3: o'clock in the morning. You can hold your meetings and 136 00:07:38,360 --> 00:07:41,200 Speaker 3: be back in your office Wogga by one point thirty 137 00:07:41,200 --> 00:07:43,520 Speaker 3: in the afternoon, having had your meeting in Sydney. So 138 00:07:43,600 --> 00:07:46,960 Speaker 3: I just make doing business in regions that much more 139 00:07:47,000 --> 00:07:48,160 Speaker 3: realistic and possible. 140 00:07:48,440 --> 00:07:50,320 Speaker 2: So how tough was last year for Rex? 141 00:07:50,760 --> 00:07:54,800 Speaker 3: Well, it started out really well. We were going going 142 00:07:54,880 --> 00:07:57,120 Speaker 3: really well. The wind was behind us, you know, the 143 00:07:57,200 --> 00:08:00,760 Speaker 3: sun was shining in our face. Things were looking really good. 144 00:08:01,040 --> 00:08:05,239 Speaker 3: And then this thing called coronavirus came along in February. 145 00:08:05,240 --> 00:08:08,280 Speaker 3: We started to sort of think about it. We had 146 00:08:08,280 --> 00:08:11,160 Speaker 3: a board meeting in February and we didn't think the 147 00:08:11,200 --> 00:08:14,320 Speaker 3: effects of coronavirus would be that significant because our passenger 148 00:08:14,360 --> 00:08:17,640 Speaker 3: numbers were growing. Everything was looking good and we didn't 149 00:08:17,680 --> 00:08:21,680 Speaker 3: see any reaction in passenger numbers to the talk of coronavirus, 150 00:08:22,480 --> 00:08:24,480 Speaker 3: so we hoped that it would not have an impact 151 00:08:24,480 --> 00:08:27,080 Speaker 3: on us. But then in March it really hit us. 152 00:08:27,360 --> 00:08:30,920 Speaker 3: And you know, an airline like Rex in those days 153 00:08:30,960 --> 00:08:33,440 Speaker 3: we had an average passenger number of about five and 154 00:08:33,440 --> 00:08:36,920 Speaker 3: a half thousand passengers a day, and within two weeks 155 00:08:36,960 --> 00:08:38,959 Speaker 3: it fell from five and a half thousand passengers a 156 00:08:39,000 --> 00:08:41,160 Speaker 3: day to one hundred and twenty. It just fell off 157 00:08:41,160 --> 00:08:44,640 Speaker 3: a cliff. And you know, we've gone through gfc's and 158 00:08:44,920 --> 00:08:50,359 Speaker 3: nine to elevens and sars and all sorts of other setbacks, 159 00:08:51,160 --> 00:08:54,160 Speaker 3: and nothing's ever happened so dramatically is that, I mean 160 00:08:54,520 --> 00:08:57,920 Speaker 3: everything else sort of it tapes down over time when 161 00:08:57,960 --> 00:08:59,960 Speaker 3: you have a setback. This just fell off a clip 162 00:09:00,200 --> 00:09:03,760 Speaker 3: and so we were suddenly confronted with an organization that 163 00:09:03,920 --> 00:09:06,360 Speaker 3: was designed to carry five and a half thousand passions 164 00:09:06,400 --> 00:09:08,480 Speaker 3: a day and only the revenue from one hundred and 165 00:09:08,520 --> 00:09:10,240 Speaker 3: twenty passtoms to day. So we had to make some 166 00:09:11,200 --> 00:09:14,600 Speaker 3: fairly significant changes and we stood a lot of people down. Sadly, 167 00:09:15,520 --> 00:09:20,400 Speaker 3: we've made nobody redundant. We've kept everybody on the books, 168 00:09:20,520 --> 00:09:25,200 Speaker 3: and we rotate people in the company so everybody gets 169 00:09:25,200 --> 00:09:28,520 Speaker 3: a turn at working, so that if you're a pilot, 170 00:09:28,559 --> 00:09:31,600 Speaker 3: you know you effectively do one week on and two 171 00:09:31,679 --> 00:09:34,280 Speaker 3: weeks off, so you do what weeks worth of work 172 00:09:34,360 --> 00:09:38,120 Speaker 3: in three and that's how it's been managed by us. 173 00:09:38,160 --> 00:09:40,400 Speaker 3: And of course the other thing that came along in 174 00:09:40,480 --> 00:09:44,080 Speaker 3: April last year was federal government assistance in a number 175 00:09:44,120 --> 00:09:48,080 Speaker 3: of forms, and that's been essential in keeping all regional 176 00:09:48,160 --> 00:09:51,040 Speaker 3: airlines going. I mean, Rex is not the only regional 177 00:09:51,040 --> 00:09:54,720 Speaker 3: airline in Australia there we're certainly the largest independent regional 178 00:09:54,760 --> 00:09:58,400 Speaker 3: airline in the country and we're a listed entity. Most 179 00:09:58,400 --> 00:10:01,560 Speaker 3: of the regional airlines in Australia if you're like family 180 00:10:01,600 --> 00:10:04,880 Speaker 3: businesses and their only balance sheet is the family home. 181 00:10:05,040 --> 00:10:08,040 Speaker 3: So now the federal government has come forward with a 182 00:10:08,840 --> 00:10:12,000 Speaker 3: plan that's kept all those regional airlines operating, REX being 183 00:10:12,000 --> 00:10:15,720 Speaker 3: one of them. And without that assistance, there would not 184 00:10:15,800 --> 00:10:19,600 Speaker 3: be a single regional airline in Australia operating today. Would 185 00:10:20,120 --> 00:10:23,319 Speaker 3: they have all shut down and people in regional Australia 186 00:10:23,360 --> 00:10:24,440 Speaker 3: would have been left stranded. 187 00:10:24,720 --> 00:10:28,760 Speaker 2: All the airlines relied on the government assistance package. One 188 00:10:28,800 --> 00:10:31,920 Speaker 2: thing that REX did do was rethink how it's going 189 00:10:31,960 --> 00:10:33,520 Speaker 2: to operate post pandemic. 190 00:10:33,840 --> 00:10:34,000 Speaker 3: Now. 191 00:10:34,040 --> 00:10:37,520 Speaker 2: That triggered some criticism from some of your competitors, not 192 00:10:37,600 --> 00:10:41,040 Speaker 2: surprisingly when you announced that you would actually be doing 193 00:10:41,200 --> 00:10:44,200 Speaker 2: capital city routes but you hadn't done previously. What's the 194 00:10:44,280 --> 00:10:46,080 Speaker 2: thinking behind that, Well, it. 195 00:10:46,160 --> 00:10:49,040 Speaker 3: Was an opportunity that we would never have expected to 196 00:10:49,080 --> 00:10:51,319 Speaker 3: have come along. One of the things you learn about 197 00:10:51,320 --> 00:10:54,080 Speaker 3: life is that there's opportunity and adversity. You know, every 198 00:10:54,080 --> 00:10:56,480 Speaker 3: cloud has a silver lining, There's lots of old sayings. 199 00:10:56,840 --> 00:11:00,920 Speaker 3: What you realize is that this adversity presented us with 200 00:11:01,000 --> 00:11:05,439 Speaker 3: the opportunity to move into the domestic airline business of 201 00:11:05,559 --> 00:11:08,120 Speaker 3: prospect we would not have considered prior to COVID. And 202 00:11:08,160 --> 00:11:11,440 Speaker 3: why wouldn't we have considered it. It's because we were 203 00:11:11,440 --> 00:11:13,920 Speaker 3: struggling to have enough pilots for our own regional operation, 204 00:11:14,040 --> 00:11:18,240 Speaker 3: let alone pilots to expand with. And all of a sudden, 205 00:11:18,240 --> 00:11:21,520 Speaker 3: COVID came along and quite a some virgin made thousands 206 00:11:21,520 --> 00:11:23,679 Speaker 3: of pilots redundant. So all of a sudden you've got 207 00:11:23,800 --> 00:11:29,000 Speaker 3: really well qualified, locally based Aussies here in Australia looking 208 00:11:29,040 --> 00:11:31,520 Speaker 3: for a job as a pilot. And so the pilot 209 00:11:31,559 --> 00:11:34,040 Speaker 3: shortage was overcome with a stroke of a pen, and 210 00:11:34,080 --> 00:11:37,880 Speaker 3: the same with cabin crewe, engineers, support staff. That all 211 00:11:37,920 --> 00:11:40,320 Speaker 3: of a sudden, it's a choice of riches. And that 212 00:11:40,480 --> 00:11:42,800 Speaker 3: was the first thing. The second thing was difficult to 213 00:11:42,800 --> 00:11:46,720 Speaker 3: get slots into airports, particularly at peak periods, in order 214 00:11:46,760 --> 00:11:48,839 Speaker 3: to operate a news service. And all of a sudden, 215 00:11:48,920 --> 00:11:51,600 Speaker 3: airports are empty, there's hardly anybody in them, and there's 216 00:11:51,640 --> 00:11:54,959 Speaker 3: lots and lots of slots available, and space in airports 217 00:11:54,960 --> 00:11:58,000 Speaker 3: for gates and for lounges and various other things that 218 00:11:58,040 --> 00:12:00,800 Speaker 3: you wouldn't have had before this. And the one thing 219 00:12:00,840 --> 00:12:03,320 Speaker 3: that we didn't have that you need in order to 220 00:12:03,360 --> 00:12:06,200 Speaker 3: expand into the domestic market was capital, and we were 221 00:12:06,640 --> 00:12:10,120 Speaker 3: able to raise capital from a private equity firm and 222 00:12:10,200 --> 00:12:12,480 Speaker 3: to the amount of one hundred and fifty million, which 223 00:12:13,040 --> 00:12:16,520 Speaker 3: is solely designed for the purpose of expanding into the 224 00:12:16,520 --> 00:12:19,000 Speaker 3: domestic market. So, all of a sudden, out of the blue, 225 00:12:19,200 --> 00:12:22,880 Speaker 3: no warning, this opportunity comes along. And Virgin, of course, 226 00:12:22,960 --> 00:12:25,840 Speaker 3: was in administration. I think most people would say it 227 00:12:25,840 --> 00:12:30,160 Speaker 3: was a fifty to fifty bet that Virgin would survive administration. 228 00:12:30,640 --> 00:12:34,040 Speaker 3: It has survived administration, but obviously it's roughly half the 229 00:12:34,080 --> 00:12:38,200 Speaker 3: size it was beforehand. It's lost half its fleet and 230 00:12:38,240 --> 00:12:41,680 Speaker 3: a great deal of its employees, and so Tiger of 231 00:12:41,720 --> 00:12:45,560 Speaker 3: course has completely disappeared as an airline, and so you 232 00:12:45,600 --> 00:12:47,400 Speaker 3: know there's a gap in the market because of the 233 00:12:47,400 --> 00:12:51,320 Speaker 3: downsizing of Virgin, the death of Tiger, and of course 234 00:12:51,400 --> 00:12:54,920 Speaker 3: Quantas also grounded the bulk of its fleet, and a 235 00:12:54,960 --> 00:12:56,960 Speaker 3: lot of that fleet won't ever fly again. I mean, 236 00:12:57,000 --> 00:13:00,000 Speaker 3: the seven four sevens won't fly again. I doubt that 237 00:13:00,200 --> 00:13:03,240 Speaker 3: the A three eighties will fly again. Although Allen's a 238 00:13:03,240 --> 00:13:05,840 Speaker 3: little bit optimistic about that. Some would say too optimistic 239 00:13:05,880 --> 00:13:08,599 Speaker 3: about the A three eighties, but unlikely to fly in 240 00:13:08,679 --> 00:13:11,160 Speaker 3: my view, And there's a whole host of other aircraft 241 00:13:11,160 --> 00:13:13,200 Speaker 3: that are unlikely to fly again in quite so, all 242 00:13:13,200 --> 00:13:16,439 Speaker 3: of a sudden there's a gap in the market. There's pilots, 243 00:13:16,720 --> 00:13:21,160 Speaker 3: there's crews, there's slots and space at airports, and we've 244 00:13:21,240 --> 00:13:24,320 Speaker 3: raised the capitol. And you know, one thing Sean about 245 00:13:24,400 --> 00:13:27,760 Speaker 3: Rex is we've been a family business. In Don Kendall's 246 00:13:28,200 --> 00:13:30,679 Speaker 3: airline was a family business. Max Hazelin's airline was a 247 00:13:30,720 --> 00:13:34,480 Speaker 3: family business. You know, Max Max could be seen, you 248 00:13:34,480 --> 00:13:37,720 Speaker 3: know at the airfield any single and shorts, you know, 249 00:13:37,920 --> 00:13:41,160 Speaker 3: mowing the grass, you know, And we run like that. 250 00:13:41,679 --> 00:13:44,840 Speaker 3: Our costs are really low, and you know, our senior 251 00:13:44,880 --> 00:13:47,320 Speaker 3: execs are paid in the two hundred thousand dollars range, 252 00:13:47,360 --> 00:13:49,240 Speaker 3: I mean the upper end of two hundred thousand. But 253 00:13:49,720 --> 00:13:51,880 Speaker 3: you know, whereas if you go to other airlines like 254 00:13:51,960 --> 00:13:54,319 Speaker 3: Quantas a Vergent, I mean, there are lots of people 255 00:13:54,360 --> 00:13:57,640 Speaker 3: there and in the millions a year, so you know, 256 00:13:57,679 --> 00:14:00,160 Speaker 3: it's a different culture all together in our business. So 257 00:14:00,240 --> 00:14:01,320 Speaker 3: our costs so much lower. 258 00:14:01,600 --> 00:14:08,160 Speaker 2: We'll be back with more in a moment. I'm talking 259 00:14:08,200 --> 00:14:11,199 Speaker 2: TOPU Chairman of Rex Group, John Sharp, I mean it's 260 00:14:11,240 --> 00:14:15,000 Speaker 2: such a tough industry, not just in terms of pandemics, 261 00:14:15,000 --> 00:14:17,800 Speaker 2: but it's a competitive industry, and Virgin is still a 262 00:14:17,840 --> 00:14:20,720 Speaker 2: competitive Quantus is a feracious competitor, and it seems to 263 00:14:20,720 --> 00:14:23,560 Speaker 2: be taking on some of the regional roots. We're talking 264 00:14:23,600 --> 00:14:25,560 Speaker 2: about Orange. I think it's doing Sydney to Orange. I 265 00:14:25,560 --> 00:14:28,640 Speaker 2: think it's doing Melbourne to Mount Gambia. Do you think 266 00:14:28,720 --> 00:14:32,400 Speaker 2: those sorts of roots can support two airlines. They're great towns, 267 00:14:32,400 --> 00:14:33,320 Speaker 2: but they're not that big. 268 00:14:33,720 --> 00:14:35,480 Speaker 3: There are great towns. I mean Orange is a great 269 00:14:35,520 --> 00:14:38,520 Speaker 3: town and all you mention is also fantastic towns. So 270 00:14:38,600 --> 00:14:42,240 Speaker 3: you know the good towns and re sizeable regional centers, 271 00:14:42,560 --> 00:14:45,240 Speaker 3: but you know they can't sustain two airlines. I mean 272 00:14:45,280 --> 00:14:48,920 Speaker 3: what Quantis is doing it's very blatant. I mean they 273 00:14:49,320 --> 00:14:51,920 Speaker 3: painted in a different color, but it's very blatant what 274 00:14:51,960 --> 00:14:55,200 Speaker 3: they're doing, and that is they're trying to punish RECKS 275 00:14:55,200 --> 00:14:59,040 Speaker 3: for moving into the domestic market by moving into our 276 00:14:59,080 --> 00:15:03,360 Speaker 3: regional markets. When you talk about Aubrey, I mean Quanas 277 00:15:03,400 --> 00:15:06,360 Speaker 3: is now flying Melbourne to Aubrey. Pre COVID there were 278 00:15:06,360 --> 00:15:10,000 Speaker 3: twenty thousand passengers a year on that route since COVID. 279 00:15:10,360 --> 00:15:14,360 Speaker 3: Over the last ten months, Aubrey to Melbourne Melbourne Aubrey 280 00:15:14,680 --> 00:15:17,920 Speaker 3: is about just under nine hundred passengers in ten months, 281 00:15:18,040 --> 00:15:20,800 Speaker 3: eighty odd passengers a month. In fact, in the whole 282 00:15:20,840 --> 00:15:23,640 Speaker 3: month of August last year, there were only nine passengers 283 00:15:23,880 --> 00:15:29,200 Speaker 3: flew on a plane between Melbourne and Aubrey. Nine passengers 284 00:15:29,240 --> 00:15:31,800 Speaker 3: in a month. That's four weeks and thirty odd days 285 00:15:31,960 --> 00:15:34,720 Speaker 3: of a potential travel and nine passengers flew in it. 286 00:15:34,760 --> 00:15:37,520 Speaker 3: Now Quanas is moving into that route, and if you 287 00:15:37,600 --> 00:15:39,720 Speaker 3: listen to Quantus, they'll tell you they're doing it because 288 00:15:39,720 --> 00:15:43,000 Speaker 3: they see that these roots will be profitable for them 289 00:15:43,480 --> 00:15:47,480 Speaker 3: and that there's pent up demand just waiting for quantas 290 00:15:47,560 --> 00:15:49,440 Speaker 3: to move in, so they all leap out of there, 291 00:15:50,000 --> 00:15:52,560 Speaker 3: out of their isolation and jump on a corners plane. 292 00:15:52,760 --> 00:15:55,280 Speaker 3: The truth is it's not going to happen. There is 293 00:15:55,320 --> 00:15:58,760 Speaker 3: no pent up demand, there is no profitable operation that 294 00:15:58,840 --> 00:16:03,040 Speaker 3: quantas are even rex can operate between places like Melbourne 295 00:16:03,040 --> 00:16:05,360 Speaker 3: to Aubrey. It's the same like Melbourne to Mount Gambia 296 00:16:05,360 --> 00:16:09,040 Speaker 3: with Alsa Melbourne to Wager. They're all in that sort 297 00:16:09,040 --> 00:16:11,720 Speaker 3: of In the last ten months, all around the nine 298 00:16:11,800 --> 00:16:15,080 Speaker 3: hundred passengers over ten months, ninety passengers a month, and 299 00:16:15,320 --> 00:16:17,720 Speaker 3: Quantus is moving into those routes claiming they can be 300 00:16:17,760 --> 00:16:22,080 Speaker 3: profitable and that they can unleash pend up demand. Because 301 00:16:22,120 --> 00:16:25,160 Speaker 3: suddenly it's Quatas, not some other little airline like Rex 302 00:16:25,200 --> 00:16:29,480 Speaker 3: that's offering services. It is a complete fabrication, it's not true. 303 00:16:29,920 --> 00:16:32,480 Speaker 3: And the truth of it is they are out there 304 00:16:32,520 --> 00:16:36,880 Speaker 3: to knock off Rex in its traditional marketplace and Quantus. 305 00:16:37,280 --> 00:16:39,680 Speaker 3: We knew Quantus would be very aggressive. It's the nature 306 00:16:39,680 --> 00:16:44,640 Speaker 3: of Quatas. Quantus has always been the biggest airline in Australia. 307 00:16:45,040 --> 00:16:48,320 Speaker 3: Some would argue they've always behaved like a bully. You 308 00:16:48,320 --> 00:16:50,680 Speaker 3: can make your own judgment in regard to that. And 309 00:16:50,800 --> 00:16:54,560 Speaker 3: Quantus has deliberately gone out of its way to squash competition. 310 00:16:54,640 --> 00:16:57,200 Speaker 3: And you may recall a few years ago when John 311 00:16:57,240 --> 00:17:02,280 Speaker 3: Borghetti started to add extra capacity Virgin and we had 312 00:17:02,280 --> 00:17:06,359 Speaker 3: this capacity war between Quantis and Virgin, and Allen Joyce 313 00:17:06,440 --> 00:17:10,159 Speaker 3: made a speech. I remember him saying that for every 314 00:17:10,280 --> 00:17:13,919 Speaker 3: one aircraft that Virgin adds to the market, Quantus were 315 00:17:13,960 --> 00:17:18,280 Speaker 3: put in two. And what he's saying is to John Borghetti, 316 00:17:18,760 --> 00:17:20,600 Speaker 3: you know we've got a bigger balance sheet than you, 317 00:17:20,800 --> 00:17:23,480 Speaker 3: and you'll have to give up because we've got more 318 00:17:23,520 --> 00:17:26,080 Speaker 3: money to throw out this problem than you have. And 319 00:17:26,160 --> 00:17:28,800 Speaker 3: that's how they operate, that's how they survive. And of 320 00:17:28,800 --> 00:17:32,040 Speaker 3: course that moment when he added two planes for everyone 321 00:17:32,080 --> 00:17:35,320 Speaker 3: that Virgin added was the beginning of the biggest loss 322 00:17:35,320 --> 00:17:38,280 Speaker 3: that Quatas had ever experienced in its history, and in 323 00:17:38,320 --> 00:17:41,480 Speaker 3: my view, it was the beginning of the end of Virgin. 324 00:17:41,760 --> 00:17:44,240 Speaker 3: And they're doing the same to us. 325 00:17:44,520 --> 00:17:48,119 Speaker 2: Are they not some sort of competition issues, predatory pricing? Potentially? 326 00:17:48,359 --> 00:17:51,720 Speaker 3: Yeah, Well, we've made a formal complaint to the a 327 00:17:51,840 --> 00:17:55,280 Speaker 3: Triple C, which to this stage has not resulted in 328 00:17:55,320 --> 00:17:59,640 Speaker 3: them taking action against Quatas. But you know, whichever way 329 00:17:59,680 --> 00:18:03,800 Speaker 3: you look, I mean, Quantas's motto is the spirit of Australia. 330 00:18:03,880 --> 00:18:07,199 Speaker 3: Now I sort of asked the rhetorical question, is it 331 00:18:07,280 --> 00:18:09,520 Speaker 3: the spirit of Australia to beat up the little guys, 332 00:18:09,760 --> 00:18:12,919 Speaker 3: be it a Virgin or Rex or somebody else. Is 333 00:18:12,920 --> 00:18:15,919 Speaker 3: it the spirit of Australia to do that? Or do 334 00:18:16,000 --> 00:18:18,160 Speaker 3: Australians like to give the little guy a go, give 335 00:18:18,160 --> 00:18:21,440 Speaker 3: the under underdog a bit of a go. Quantas certainly 336 00:18:21,720 --> 00:18:24,840 Speaker 3: doesn't subscribe to the underdog theory to give people a go. 337 00:18:25,720 --> 00:18:28,119 Speaker 3: They see somebody challenging their position and they just go 338 00:18:28,160 --> 00:18:30,399 Speaker 3: out and squash them. And that's what happened to Virgin, 339 00:18:30,680 --> 00:18:32,560 Speaker 3: and you know they're trying to do it to Rex. 340 00:18:32,600 --> 00:18:35,479 Speaker 3: The problem that he's got is, you know, when he 341 00:18:35,560 --> 00:18:38,320 Speaker 3: was doing that to Virgin, Virgin actually had higher costs 342 00:18:38,880 --> 00:18:42,240 Speaker 3: than Quantas had. In our case, we've got much lower 343 00:18:42,280 --> 00:18:45,480 Speaker 3: costs than Quantus has, and we don't have any debt 344 00:18:45,600 --> 00:18:48,880 Speaker 3: and Allen and Quantas have got an enormous amount of debt. 345 00:18:49,119 --> 00:18:51,320 Speaker 3: And of course they're losing a lot of money. The 346 00:18:51,400 --> 00:18:54,399 Speaker 3: record loss for six months one point four to seven 347 00:18:54,560 --> 00:18:59,600 Speaker 3: billion statutory loss and the last half. And you know, 348 00:18:59,640 --> 00:19:02,359 Speaker 3: Rex didn't make a loss. We traded at a profit 349 00:19:02,359 --> 00:19:05,560 Speaker 3: in the last half. So you know, if you're losing 350 00:19:05,600 --> 00:19:09,119 Speaker 3: money and you expand your airline operations in order to 351 00:19:09,119 --> 00:19:12,200 Speaker 3: punish other people, but in the process add to your 352 00:19:12,359 --> 00:19:14,879 Speaker 3: already record losses, it doesn't make a lot of sense 353 00:19:14,880 --> 00:19:15,119 Speaker 3: to me. 354 00:19:15,520 --> 00:19:17,280 Speaker 2: Look, John, good luck with that. I've got to ask 355 00:19:17,280 --> 00:19:19,960 Speaker 2: you one final question. Would you do what John Anderson's 356 00:19:19,960 --> 00:19:21,800 Speaker 2: doing and ever go back in federal politics. 357 00:19:22,040 --> 00:19:25,400 Speaker 3: Well, you know, I think it's wonderful that John's going back. 358 00:19:26,000 --> 00:19:27,800 Speaker 3: Very old friend of mine, and I rang him only 359 00:19:27,840 --> 00:19:30,600 Speaker 3: a couple of nights ago to wish him well on 360 00:19:30,720 --> 00:19:35,120 Speaker 3: his course. I mean, if he was a navigator, he'd 361 00:19:35,160 --> 00:19:38,640 Speaker 3: be doing a one under eighty degree turned going back 362 00:19:38,680 --> 00:19:42,159 Speaker 3: to the past. But look, he's a very able fellow, 363 00:19:42,880 --> 00:19:46,479 Speaker 3: very strong principles, and a man who's guided by public 364 00:19:46,840 --> 00:19:51,760 Speaker 3: benefit rather than personal benefit, which sometimes you wonder if 365 00:19:51,840 --> 00:19:54,080 Speaker 3: that's not the primary driver of a lot of people 366 00:19:54,119 --> 00:19:56,879 Speaker 3: in politics today. So would I go back No, I 367 00:19:57,480 --> 00:20:00,000 Speaker 3: don't believe in going backwards. I believe in going forward. 368 00:20:00,040 --> 00:20:02,040 Speaker 3: So I think you do things in life and you 369 00:20:02,119 --> 00:20:05,240 Speaker 3: move on. I think life is a series of forward progressions. 370 00:20:05,600 --> 00:20:08,240 Speaker 3: Plus the other thing is life in politics is a 371 00:20:08,240 --> 00:20:09,919 Speaker 3: hard life. 372 00:20:10,440 --> 00:20:12,480 Speaker 2: It's not an easy camber. 373 00:20:12,920 --> 00:20:15,359 Speaker 3: I was. I had a large country seat, you know. 374 00:20:16,040 --> 00:20:18,639 Speaker 3: It used to take me two weeks of non stop 375 00:20:18,760 --> 00:20:22,080 Speaker 3: driving in the breaks between parliamentary sittings to get around 376 00:20:22,080 --> 00:20:27,600 Speaker 3: my electorate. And three towns a day take me two weeks. 377 00:20:27,640 --> 00:20:30,800 Speaker 3: It's hard work. And and that's to say the airline 378 00:20:30,800 --> 00:20:32,879 Speaker 3: andsry is hard work and getting out of the frying 379 00:20:32,920 --> 00:20:38,080 Speaker 3: pan into the fire. But I think politics is best 380 00:20:38,119 --> 00:20:40,600 Speaker 3: done by people a bit younger than me now and 381 00:20:40,640 --> 00:20:43,679 Speaker 3: honestly that if you talk to the guys in the 382 00:20:43,720 --> 00:20:46,320 Speaker 3: game today, they'll tell you the stuff they put up 383 00:20:46,359 --> 00:20:51,520 Speaker 3: with the social media. It's just incredible. It's unbelievable. What 384 00:20:51,560 --> 00:20:54,040 Speaker 3: they say anonymously as opposed to what they'd say with 385 00:20:54,160 --> 00:20:56,720 Speaker 3: their name attached to it are two totally different things. 386 00:20:56,760 --> 00:20:59,479 Speaker 3: And the stuff is vicious. And you've seen Nicole Flint, 387 00:20:59,600 --> 00:21:02,159 Speaker 3: I think as a liberal from South Australia's and now 388 00:21:02,280 --> 00:21:05,040 Speaker 3: she's not going to continue, you know, an able person. 389 00:21:05,040 --> 00:21:07,639 Speaker 3: From what I understand, she's not continued because of the 390 00:21:07,680 --> 00:21:11,040 Speaker 3: pressures that she feels from social media. So good question. 391 00:21:11,080 --> 00:21:13,160 Speaker 3: Why would anybody go in it? But I just wish 392 00:21:13,200 --> 00:21:15,199 Speaker 3: John Andison all the very best, and I tell him 393 00:21:15,200 --> 00:21:17,240 Speaker 3: I'm very grateful that people of his statutes are in 394 00:21:17,280 --> 00:21:19,560 Speaker 3: caliber are prepared to stand fantastic. 395 00:21:19,640 --> 00:21:21,200 Speaker 2: John, thanks for talking to Fear and Greed. 396 00:21:21,359 --> 00:21:23,200 Speaker 3: Oh thank you very much, Jewan for having me on. 397 00:21:23,359 --> 00:21:26,040 Speaker 2: That was John Chump, Deputy Chairman of the Rex Group.