REX shares rally as it confirms its ambitions to (eventually) rival Qantas, Virgin
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Regional Express (ASX:REX) has today confirmed media speculation it’s looking to serve capital city routes but says nothing’s concrete and the move would not occur until next year.
The airline has historically operated regional routes only with a fleet of Saab 340 turboprop aircraft.
It estimates it will need $200m for its plans and says it has been approached by interested investors.
Regional Express says it will make a decision as to whether or not it will proceed within the next eight weeks. If it does go ahead with its growth ambitions, the new operations will begin in March next year.
Stockhead sought comment from the airline on the impact either a re-emergence of Virgin Australia (ASX:VAH) or its liquidation would have on these plans.
“It will depend on whether we find the right equity partner, whether the world wide situation has deteriorated, the state of the Australian economy and situation,” it said.
Shares have climbed over 30 per cent today.
Even if Regional Express’ plans don’t come to fruition, the future is looking brighter than it did a few weeks ago.
Although the Morrison government did not help bail out Virgin Australia, it provided a $298m funding package to help regional airlines like Regional Express.
“This meaningful assistance package not only seeks to keep essential air services going, but also tries to prevent the existing regional aviation providers from collapsing,” Regional Express deputy chairman John Sharp said.
While interstate travel still remains a few weeks away, regional travel is gradually getting underway, most notably in South Australia. Regional Express operates seven intrastate routes in the Festival State.
It also appears Qantas’ (ASX:QAN) push into some of Regional Express’ routes, such as Sydney to Orange, are taking a back seat for the time being.
Australia’s flag carrier was meant to start flights to the regional New South Wales city on May 1 but it will not start until at least July now.