REGIONAL EXPRESS (REX): Stuck in an outdated rural timewarp?

Jo Ashton is a colourful and acerbic business commentator for the Australian Financial Review. His Rear Window column, even if you don’t know anything about the people he targets is always a fun read.

Last Monday’s column takes a firm swipe at John Sharp the Deputy Chairman of Regional Express (REX), the new(ish) competitor to the capital city to capital city routes along the eastern seaboard of Australia – basically Brisbane, Melbourne and Sydney with a sidebar for Adelaide. Joe Ashton is not impressed by the deputy chairman’s attitude or the performance of the company.

Some background to Australian politics

The new kid on the block (REX) has old-fashioned sensibilities. It doesn’t have a contemporary frequent flyer scheme – from which Australian airlines often earn half their income, and champions the retro jam & cream scones of the Country Women’s Association.

Deputy Chairman Sharp is an ex-leader of Australia’s most conservative mainstream party, the National Party which usually works in coalition with the slightly less conservative Liberal Party. For those readers unfamiliar with Australian politics, the Liberals are like the GOP in the USA and the Conservatives in the UK. Our current government has the Labour Party in power, equivalent to the Democrats in the USA and the Labour party in the UK.

Traditionally, the National Party represented the monied rural class – in the Australian vernacular ‘cockies’ for Cockatoos. That traditional base is waning, and they are now seen as creatures of big rural businesses including oil, gas and mining.

REX’s Performance

REX raised AU $150 million in November 2020 to lease ex-Virgin Australia 737s to equip these new capital city routes. It always had modest aims, but with only 6% of the market, and having lost AU $17 million for the half-year to December 31 2022, while profits of other airlines soared. For example, Qantas reported a 1.3 Billion profit before tax etc. for the same period

It’s a red flag when your deputy chairman inserts himself in menu planning. Sharp firing up the pie warmer – that’s what Rex investors really need, isn’t it? Maybe he should DJ the lounge playlist too, and they’ll have The Very Best of John Williamson on infinite loop.

‘Stuck in a time warp with Rex’s John Sharp’, Jo Ashton, AFR, 20 March 2023

REX’s conservative deputy chairman mocked

The Ashton article very amusingly mocks Sharp, as entirely the wrong person to be involved in micro-managing things like menu and music selection, despite the evidence that he does, and holds archaic and maybe misogynistic views on women being members of boards.

2PAXfly Takeout

I recommend you read the article, although it is behind a paywall, but may be available to some viewers of Apple news etc. I leave you with this further quote from the article:

Rex’s market share is stuck at 6 per cent because only 6 per cent of Australians are stuck in a time warp – a time warp of scones and Aryan sandwiches, of female-free decision-making and life tenure. Rex is the Spirit of Bygone Australia. It may be time to broaden its appeal.

‘Stuck in a time warp with Rex’s John Sharp’, Jo Ashton, AFR, 20 March 2023

It doesn’t bode well for the future progression of the airline.

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