REX is currently in administration and is being managed by administrators who are going through a process of trying to find a saviour for the financially troubled airline.

The Australian Federal Government has already provided a loan of up to $80 million to keep REX's regional routes operating until 30 June 2025 and acquired $50 million of debt from REX's largest credit, PAGAC Regulus, earlier this year to ensure the airline could continue to operate.

What's happening with Regional Express now?

The administrators are currently working through a competitive sales process to try to find a new owner for the business.

The Federal Government has said it will "work with shortlisted bidders on what support the Albanese Government may be able to provide to maximise the prospect of a successful sale."

While the Federal Government is not a bidder in the upcoming sales process, and it wants to see a successful market-led outcome, it's open to stepping in to ensure the airline continues operations for regional Australians. The Prime Minister of Australia, Anthony Albanese, said in a statement:

…in the event there is no sale, the Albanese Government will undertake necessary work, in consultation with relevant state governments, on contingency options, including preparations necessary for potential Commonwealth acquisition.

The Albanese Government is also providing further support through a waiver of the "use it or lose it" test for Rex regional flight slots at Sydney Airport, which will ensure its access to those slots until 24 October 2026.

These actions make clear the Government's ongoing commitment to maintaining access to aviation services for regional and remote communities, and recognises the critical role of the Rex network to local economies.

Albanese then said:

Regional Australians deserve access to quality and crucial regional aviation services.

We are working collaboratively with the administrators of REX to ensure that regional services continue beyond June 2025, including looking at what support the Commonwealth can provide.

Regional Australians can be assured that our Government will continue to fight to ensure these regional airfares remain available.

Why is this affecting the Qantas share price?

On a day when the S&P/ASX 200 Index (ASX: XJO) is up 0.3%, the fall of close to 1% for the Qantas share price is quite noticeable.

Share prices are generally a reflection of the market's expectations of the ability of the company's future profit. If REX went out of business, it would mean less competition for Qantas, which could help both revenue and profit for the airline.

However, if the government stepped in to save REX, Qantas' profit may not be quite as high as expected by some investors in the longer term.

The broker UBS currently expects Qantas to make a net profit of $1.64 billion in FY25 and, in the longer term, $2 billion of net profit in FY29.

Qantas share price snapshot

In the past 12 months, the Qantas share price has risen more than 60%.

The post Why is the Qantas share price having such a tough time today? appeared first on The Motley Fool Australia.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock finished off June trading for $5.85 each.

When the closing bell sounded on 31 July, those same shares were changing hands for $6.46 apiece.

That put the Qantas share price up an impressive 10.4% over the month or more than double the 4.2% gains posted by the ASX 200 in July.

Here's what's been happening.

Qantas share price flies higher in July

There was no new price-sensitive news from the airline in July.

Instead, the Qantas share price broadly continued with the upward trend it entered in early March when shares hit a 2024 low closing price of $5.01.

That comes as Qantas continues to rebuild its battered brand image following some difficult months post the pandemic reopening.

In July, the airline also received positive broker and fund manager coverage, including from Shaw and Partners senior investment advisor Jed Richards.

Richards has a buy rating on Qantas and cited numerous reasons why he believes the ASX 200 airline is well-positioned for ongoing strong performance.

Among those, he said, "The company's loyalty business is expected to double earnings over the next five to seven years."

He also thinks the Qantas share price will "benefit from new and more fuel-efficient aircraft."

And atop the airline's solid balance sheet, Richards expects shareholders to benefit from the rollout of Project Sunrise, which will offer direct flights from Australia's east coast to New York and London.

July also saw Regional Express Holdings Ltd (ASX: REX) enter administration.

Rex's regional flights are continuing for now.

However, Rex has halted all flights between the Sydney, Melbourne, and Brisbane airports, and its fleet of Boeing 737s is grounded.

While that's unlikely to have an immediate material impact for Qantas, it could support the company's share price with yet another junior competitor hitting the skids in 2024, with Bonza having run into difficulties earlier this year.

In a statement, Qantas said it was "prepared to connect Rex employees with potential opportunities within the Qantas Group as they go through the process of voluntary administration".

Now what?

Well, the first three trading days of August haven't started with a bang.

To say the least.

The Qantas share price closed down 4.93% yesterday, ending the day at $5.78 a share.

That sees shares in the ASX 200 airline down 10.53% since the market close in July.

Of course, it's not just Qantas under pressure in August. The ASX 200 closed down 3.7% yesterday, putting the benchmark index down 5.47% in the new month.

As for what's next, I think that the longer-term outlook for the flying kangaroo remains strong.

With the past three days of selling, the Qantas share price is again down some 20% from its pre-COVID levels, despite domestic travel demand rebounding to 2019 levels and international travel demand also closing in on that milestone.

And with the oil price heading sharply lower in recent weeks, Qantas could enjoy some extra tailwinds from lower fuel bills in the months ahead.

The post After smashing the ASX 200 in July, what's next for the Qantas share price? appeared first on The Motley Fool Australia.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.18. In morning trade on Wednesday, shares are changing hands for $6.24 apiece, up 1.0%.

For some context, the ASX 200 is up 0.4% at this same time.

This comes amid news that Regional Express Holdings Ltd (ASX: REX) has now officially entered administration.

Here's what we know.

Rex announces administrators

On Monday the Motley Fool reported that Rex had entered a trading halt pending a market announcement. That announcement was related to media speculation that Rex was in financial turmoil and headed for administration. The Qantas share price closed up 0.5% on the day.

Yesterday, Rex shares remained suspended as new media reports emerged suggesting Rex was likely to appoint Ernst & Young as administrators. The Qantas share price closed up 1.6% yesterday, even as the ASX 200 ended the day down 0.5%.

This morning, we learned that the latest media speculations were indeed correct.

Rex just released an announcement that it has entered into voluntary administration alongside its wholly owned subsidiaries. Ernst & Young Australia have been appointed administrators.

The airline's Regional Saab 340 flights are currently unaffected by the administration and will continue to operate.

However, flights between the major airports like Sydney, Melbourne and Brisbane have been cancelled. Rex's fleet of Boeing 737 aircraft are now all grounded.

Rex said that Virgin Australia will offer customers with an existing ticket on a flight cancelled due to the administration process the opportunity to transfer their ticket free of charge to any of 13 overlapping Virgin Australia services.

The ASX has now suspended Rex shares from trading.

The ASX stated:

ASX has determined REX's financial condition is not adequate to warrant the continued quotation of its securities and therefore does not comply with Listing Rule 12.2.

The securities will remain suspended until such time that ASX is satisfied with REX's compliance with the Listing Rules…

While the impact on Qantas' bottom line is unlikely to be material over the shorter term, with another Aussie airline following Bonza into administration in a matter of months, the Qantas share price could catch some updrafts.

Although Rex did not mention Qantas, the ASX 200 airline also reached out this morning to Rex's impacted customers and staff.

"This is a challenging day for our industry, and we are sad to see Rex enter voluntary administration with the immediate suspension of its Boeing 737 operations," Qantas stated.

Qantas continued:

Rex customers impacted by cancelled flights due to the grounding of their domestic jet services can contact Qantas and Jetstar to be reaccommodated on the same route as their original booking at no charge, where we have seats available…

We are also prepared to connect Rex employees with potential opportunities within the Qantas Group as they go through the process of voluntary administration.

Qantas share price snapshot

With the Qantas share price continuing its solid turnaround today, shares are now up just over 16% in 2024.

The post Qantas share price catches updraft as Rex enters administration appeared first on The Motley Fool Australia.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.08. In early afternoon trade on Tuesday, shares are swapping hands for $6.11 apiece, up 0.5%.

For some context, the ASX 200 is down 0.7% at this same time.

If Qantas shares can hold onto these gains at market close, it will mark the fourth consecutive day of gains for the company.

What's happening in the Aussie airline industry?

Qantas shares closed up 0.5% yesterday, a day that saw junior rival Regional Express Holdings Ltd (ASX: REX) enter a trading halt.

Regional Express shares remain in a trading halt today, frozen at 56 cents apiece. That sees the Rex share price down a painful 50% over 12 months.

Why the trading halt?

Well, as the Motley Fool reported yesterday, Rex requested the trading halt pending an announcement "in relation to a news article" published over the weekend. Shares are expected to recommence trading tomorrow, unless the airline releases that update within trading hours today.

The article in question appears to have been published in The Australian. That article conjectured that Rex possibly "invited a turnaround team from Deloitte to rifle through its books and try to stop the proverbial plane from crashing into the mountain".

Rex reportedly has struggled to expand into the lucrative Sydney, Melbourne, and Brisbane triangle, where airlines like Virgin and Qantas already hold dominant market share positions.

Rex has yet to respond to the specifics in the article. But citing sources familiar with the matter who wished to remain anonymous, The Sydney Morning Herald reported today that Rex is likely to appoint Ernst & Young as administrators.

Transport Minister Catherine King told ABC TV, "We are treating this very seriously and being very vigilant about what is happening and keeping an eye on the situation hour by hour."

King added, "There is a range of reasons why trading halts are put on companies, it does happen, but we will get some further information."

King addressed the collapse of budget airline Bonza in late April this year, noting that Rex was in a stronger position as it owns its own planes rather than leasing them like Bonza.

Tomorrow, we should know more about what's happening with Rex and whether Qantas could see another junior rival go under.

How have Qantas shares been tracking?

Qantas shares have enjoyed a strong rebound in 2024, up 14% year to date.

The post How are Qantas shares reacting to the unfolding Rex drama? appeared first on The Motley Fool Australia.

In fact, Rex stock isn't doing much at all this session.

Investors may have noticed that the airline's shares were not available for trading upon market open this morning.

Just before trading commenced, Rex issued an ASX filing informing investors that trading of its shares would be temporarily paused "pending a further announcement".

Not too long afterwards, Rex expanded on that announcement slightly, stating the following:

Regional Express Holdings Limited (Rex, ASX: REX) requests the securities of the company to be placed in an immediate trading halt pending a material announcement in relation to a news article published on Saturday, 27th July 2024.

Rex advises the trading halt is to last until the commencement of trade on Wednesday, 31st July 2024 or until the announcement mentioned above has been made. Rex confirms that is not aware of any reason why the trading halt should not be granted or of any other information necessary to inform the market about the trading halt.

So that's all we know for sure right now. But there's a lot to unpack here.

Rex share price paused as rumours swirl

It looks as though the "news article" that Rex is referencing might be an article published in The Australian on Saturday.

This article alleges that Rex may have "invited a turnaround team from Deloitte to rifle through its books and try to stop the proverbial plane from crashing into the mountain". This comes after what has reportedly been an unsuccessful attempt to expand into providing flights between Sydney, Melbourne and Brisbane.

The article goes on to allege that "Deloitte's partners are in a fever attempting a restructure solution as a rescue package. That too, we hear, is teetering towards failure".

This is the second trading halt in as many months that the Rex share price has gone through. Back in June, we covered the trading halt that was implemented following the release of some updated financials from the airline.

After initially forecasting an operationally profitable FY2024, Rex revealed that it now expects to book a $35 million loss. The company blamed a "global shortage of pilots and engineers, along with supply chain shocks post-COVID" for that downgrade.

So, we'll have to wait for Rex's response to the article's assertions later this week to find out what's going on. But there's little doubt that Rex shareholders will not welcome these developments.

At the last Rex share price of 56 cents, the company was nursing a year-to-date loss of 22.52%. That's in addition to a 50% cut from where the shares were this time in 2023.

Let's see what happens when the airline returns to trading.

The post What on earth is going on with the Rex share price today? appeared first on The Motley Fool Australia.

And the S&P/ASX 200 Index (ASX: XJO) airline stock is already hitting some turbulence during the second trading day of September.

Qantas shares closed down 1.5% on Friday, 1 September. And the stock is down 2.9% in early afternoon trade today, at $5.65 per share.

For some context, the ASX 200 is up 0.47% at this same time.

With a rocky start to the new month, what's ahead for the flying kangaroo in September?

What's ahead for the ASX 200 airline in September?

Qantas shares could face headwinds on several fronts in the month ahead.

Last week saw the Australian Competition and Consumer Commission (ACCC) accuse the airline of advertising and selling 8,000 flights, despite knowing those flights were cancelled.

ACCC chair Gina Cass-Gottlieb indicated the Commission would be seeking fines that would send a serious message to management.

"We are going to seek a penalty that will underline that this is not just to be a cost of doing business, it is to deter conduct of this nature," she said.

So, just what sized fine is required to underline that point?

"We think the penalties should be in the hundreds of millions, not tens of millions for breaches," Cass-Gottlieb said.

Qantas responded today, stating:

The ACCC's allegations come at a time when Qantas' reputation has already been hit hard on several fronts. We want the community to know that we hear and understand their disappointment.

We know that the only way to fix it is by delivering consistently. We know it will take time to repair. And we are absolutely determined to do that.

Should the ACCC's legal actions make progress in September, or garner significant media attention, this could continue to pressure Qantas shares.

What else could impact Qantas shares?

Investors will also be keeping an eye on the airline's dominant market position this month.

With travel demand continuing its post-pandemic rebound and airfares remaining elevated, Qantas reported a 118% year on year increase in FY 2023 revenue, to $19.8 billion. And the ASX 200 airline notched an all-time high underlying profit before tax of $2.5 billion.

Those super profits appeared to be at risk in early June, potentially dragging on Qantas shares. That came after Qatar Airways petitioned Federal Transport Minister Catherine King to double the volume of international flights allowed on the Sydney, Melbourne and Brisbane routes.

In July, Qantas got a big reprieve when King announced, "The Australian government is not considering additional bilateral air rights with Qatar."

But this story continues to unfold and could yet impact Qantas shares in September.

Numerous politicians and officials are questioning whether the government should be protecting Qantas' profit margins by stifling competition in the market.

And the airline's competitors are joining in the fray.

As ABC News reports, Regional Express Holdings Ltd (ASX: REX) deputy chairman John Sharp said the airline industry in Australia is the "most concentrated industry in the world".

Sharp is in favour of potentially allowing Qatar to operate more flights in Australia.

"I think it's appropriate if they were to reverse the decision on Qatar flights," he said.

Sharp pointed out that Qatar helped bring home more Aussies stuck overseas during the pandemic than Qantas did.

While that might impact Qantas future profits, and Qantas shares, Sharp also said that the move would help consumers, saying airfares would "clearly" come down "with more competition".

The post Own Qantas shares? Here's what's coming up for the ASX 200 airline in September appeared first on The Motley Fool Australia.

Descending into the afternoon, shares in Australia's largest independent regional airline operator are 14% lower at $1.04 apiece. Earlier today, the company's share price was punished to a fresh 52-week low of $1.00.

Guiding for a bumpy result

Regional Express delivered a doozy of an update to the market late yesterday afternoon.

The announcement, which pertains to the airline's interim guidance, has had plenty of time to be soaked in by shareholders overnight. Today's verdict is clear… the revision is not a pleasing one.

Back on 28 February this year, the company's management noted their optimism, believing the airline could deliver an operationally profitable FY23.

Unfortunately, that sentiment has now been squashed amid a global shortage of pilots and engineers; a disrupted network; and exhausted business travel spending. Consequently, the airline is now forecasting an operational loss of $35 million for the financial year.

At the same time, management remains positive operational profits could materialise in FY24.

Oddly, these expectations are the reverse of what is being witnessed in Qantas Airways Limited (ASX: QAN). Seemingly unimpeded by the headwinds faced by Regional Express, the flying kangaroo is eyeing an all-time record profit of between $2.425 billion and $2.475 billion in FY23.

Meanwhile, chief economist at the International Air Transport Association (IATA), Marie Owens-Thomsen, believes the global airline industry could be on course for weakening as it flies beyond the current financial period.

Is the Rex share price now cheap?

It's difficult to evaluate the intrinsic value of an unprofitable and cyclic company. Though, there are a couple of fundamental metrics that are possibly worth considering.

Firstly, the airline is trading slightly below its book value, as shown in the chart below. This would suggest the company is trading at a discount to the value of its assets. Although, it's not a perfect rule as the 'real' value of its assets could vary.

Regional Express price-to-book ratio chart by TradingView.

Secondly, the Rex share price could be influenced by the company's balance sheet. Debt has grown significantly since 2020, now sitting at a net debt position of $168 million.

At the end of last year, debts were well covered by operational cash flow. Today's revised guidance might bring the extent of coverage into question.

The Regional Express share price is down 28.3% since the start of the year.

The post Why did the Rex share price just nosedive 14%? appeared first on The Motley Fool Australia.

Qantas shares lifted 0.78% today to close at $6.47. For perspective, the S&P/ASX 200 (ASX: XJO) jumped 0.66% today. Flight Centre Travel Group Ltd (ASX: FLT) shares rose 0.51% today, while Webjet Ltd (ASX: WEB) shares climbed 2.28%.

Let's examine in more detail what might play out for Qantas in the future.

What's ahead?

Qantas and its subsidiary Jetstar may soon face competition from a new airline.

Budget airline Bonza has received approval from the Civil Aviation Safety Authority to launch flights within Australia.

Bonza will fly to destinations including the Sunshine Coast, Mildura, Albury, Cairns, Coffs Harbour, Melbourne, Avalon, Newcastle, Tamworth, Townsville, Bundaberg, Gladstone and Toowoomba, according to an Australian Aviation report.

However, RBC Capital Markets analysts warn new airline Bonza could place pressure on Jetstar ticket pricing. In a note quoted by The Australian, analysts said they believed Bonza was targeting a market somewhere "between Jetstar and QantasLink/Regional Express Holdings Ltd (ASX: REX)".

Jetstar is 100% owned by Qantas and operates flights at budget prices. During COVID-19, Jetstar competitor Tigerair folded after 13 years of operation.

What's the plan?

Initially, Bonza will test the market and then target more of Jestar's market if this strategy is successful, the publication reported. This could place "increased pressure on ticket pricing, which Jetstar has been able to benefit from over the last 12 to 18 months".

RBC Capital added:

Initially, Bonza will only be competing directly with Jetstar as the discount operator on isolated routes out of Melbourne.

We believe this initial small step on Jetstar's routes is deliberate as a means of testing the market and its own operations

Despite RBC Capital's comments on Bonza, the broker still has a $7.25 price target on the Qantas share price. This implies an upside of 7.5% based on today's closing price.  

Meanwhile, analysts at Morgans have recently placed an add rating on the Qantas share price with an $8.50 price target.

Share price snapshot

Qantas shares have soared 30% in the last year.

Qantas has a market capitalisation of about $11.7 billion based on the current share price.

The post Could Qantas shares hit turbulence as competition ramps up? appeared first on The Motley Fool Australia.

Qantas shares closed up 5.3% on the day. This followed an unexpected profit guidance upgrade, which came on the heels of a previous upgrade in early October.

The ASX 200 airline lifted its half-year forecast for underlying profit before tax by $150 million from its October guidance to a new range of $1.35 billion to $1.45 billion.

Part of the profit guidance boost is attributable to a strong rebound in domestic and international travel figures.

Another part, as recent air travellers can likely attest to, is a sharp lift in ticket prices.

Which brings us to the latest accusations being levelled at the flying kangaroo.

What's this about price gouging?

Qantas shares made The Australian Financial News headlines after Regional Express Holdings Ltd (ASX: REX) deputy chairman John Sharpe said the high price for domestic airfare Qantas is charging represents price gouging.

Sharpe acknowledged the industry-wide impacts of soaring jet fuel costs and multi-decade high inflation levels. "Fuel prices are high and inflation is a problem and impacting us," he said.

Indeed, Qantas estimates it will spend a record $5 billion fuelling its fleet in the 2023 financial year.

But Sharpe doesn't believe the elevated prices Qantas is charging domestic passengers aligns with those higher costs.

"It just doesn't stack up," he said.

According to Sharpe (quoted by the AFR):

You could literally buy one of our business class airfares for half the price of an economy seat on some Qantas flights – and we're on exactly the same planes. We operate a 737-800 MG to and from Melbourne. It's the same plane, the same route and I would say the in-cabin product is as good as theirs…

I don't think Virgin is gouging people but with Qantas and their prices it would appear that they are gouging.

How have Qantas shares been tracking this year?

Qantas shares have staged a strong rebound in 2022, gaining 18% so far. That compares to a 4% year to date loss posted by the ASX 200.

The post Own Qantas shares? Guess what the airline is being accused of now appeared first on The Motley Fool Australia.

Travel shares on the ASX include Qantas Airways Limited (ASX: QAN), Webjet Limited (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT). More ASX travel shares with a market cap over $100 million include Regional Express Holdings Ltd (ASX: REX), Corporate Travel Management Ltd (ASX: CTD) and Helloworld Travel Ltd (ASX: HLO)

Let's take a look at how these travel companies performed in September.

Travel shares fall

ASX travel shares struggled in September. Flight Centre shares slumped 20.56% between market close on 31 August and 30 September. The Qantas share price lost 5.64% in the same timeframe, while Webjet shares fell 13.77%. Meanwhile, the Regional Express share price shed 5.71%, Corporate Travel Management lost 13.71% and Helloworld Travel dropped 8.25%.

For perspective, the benchmark ASX 200 index shed 7% in September.

Travel shares appeared to struggle amid interest rate hikes, recession fears, industry weakness, and travel chaos.

United States travel shares also fell in September. For example, Delta Air Lines Inc (NYSE: DAL) shares lost nearly 10%, while American Airlines Group Inc (NASDAQ: AAL) and United Airlines Holdings Inc (NASDAQ: UAL) shares both descended 7%.

However, Qantas did release some positive news on its performance in September. The company's on-time performance improved in the first two weeks of the month. Flight delays, cancellations and mishandled bag rates all dropped.

Qantas' annual report also shed light on the salary of CEO Alan Joyce. Joyce received a $2.3 million base salary and other benefits in the 2022 financial year, 15% more than FY21.

Flight Centre shares continued to be the most shorted share on the ASX in September. This was despite Goldman Sachs tipping upside for the Flight Centre share price. Goldman Sachs placed a neutral rating and $19.60 price target on the company's shares.

Webjet shares fell despite a broker upgrade. Webjet also provided a strategy update to the market in September. The company noted international flight bookings had improved in 2023. Webjet is planning to increase use of social media and video platforms, reduce paid search advertising and retain marketing spend at 1.5% of time to value (TTV).

The post Did ASX travel shares do well in September? appeared first on The Motley Fool Australia.

Qantas shares closed yesterday trading for $5.35 and are currently trading for $5.34 apiece.

While a loss is a loss, the Qantas share price is holding up better than the broader market, with the benchmark S&P/ASX 200 Index (ASX: XJO) down 1.1% at this same time.

The ASX 200 sell-off follows another day of significant losses in US markets, with US futures pointing to another rough day ahead on the NASDAQ-100 (NASDAQ: NDX) and Dow Jones Industrial Average Index (DJX: .DJI).

But, what's this about Qantas' competitor Virgin Australia eyeing merger opportunities?

Is Virgin Australia looking to spread its wings?

If you cast your mind back a few years, you will likely recall that Virgin Australia used to trade on the ASX. And, indeed, it may do so again with a potential initial public offering (IPO) flagged for as early as next year.

Virgin entered voluntary administration in April 2020. That was right when domestic and global air travel came to an abrupt halt amid the early months of the pandemic.

Bain Capital bought Virgin in October 2020 for $3.5 billion and continues to hold the airline today.

Regarding Virgin's acquisition plans, in an article published by The Australian after markets closed yesterday, the paper said its sources had indicated Virgin and Air New Zealand Limited (ASX: AIZ) have discussed a merger. The column also said Virgin is investigating acquiring Regional Express Holdings Ltd (ASX: REX).

According to the article, unnamed sources reported that investment banks Goldman Sachs and Jarden have been offering assistance to Virgin regarding possible merger plans. It was said the plan would involve "a back door dual listing" on both the ASX and the New Zealand Exchange (NZX).

As far as the Air New Zealand discussion goes, the airline responded to the media merger speculations this morning, stating:

Air New Zealand confirms that it has not been approached, and is not in discussions with any parties, regarding a potential merger transaction.

As for any potential impact on Qantas shares, if Virgin were to acquire Rex, The Australian said its sources indicated that would only move forward if Rex were to return to solely flying regional routes.

Qantas share price snapshot

The Qantas share price has outperformed in 2022, up 3.7%. That compares to a 10.8% loss posted by the ASX 200.

The post Qantas share price outperforms as Virgin eyes merger opportunities appeared first on The Motley Fool Australia.

The Qantas share price is down 1.51% to $5.23 per share while the Rex share price is up 5.32% in late afternoon trading.

Let's take a look at what's happening with airline shares today.

Experts believe the Qantas share price can go higher

Fund manager Perennial and broker Macquarie are both bullish about Qantas' future prospects, as covered by my colleague Cathryn Goh.

Both parties expressed their optimism for Qantas' outlook, believing demand for travel will continue to rise as people shift spending away from personal consumption to leisure activities.

These experts present the bull case but some sections of the market have noted the airline's dubious decision to engage in a $400 million share buyback.

There have also been grave concerns about the lack of staff causing major constraints to Qantas' ability to meet demand.

As reported by Reuters, rival Virgin Australia is also experiencing staffing issues, noting its high staff illness rates were hampering capacity, forcing it to lift fares for domestic flights.

Qantas has come under fire recently for the rise in flight delays and cancellations. The problems have been attributed to a shortage of airport workers and high staff illness levels.

Rex leads the way

But where Qantas and Virgin have stumbled, Rex has taken a more proactive approach to address the labour shortage.

Today, the regional airline announced it has signed new industrial agreements with two key sections of its workforce.

Rex noted there was overwhelming staff support, with 75% of flight attendants and 92% of engineers voting in favour of the enterprise agreements.

The new enterprise agreements will be valid for three years for flight attendants and four years for engineers and include pay rises for both groups.

Perhaps Qantas may need to take a leaf out of Rex's playbook and tackle the labour issue.

The Qantas share price could be under the pump after some negative headlines concerning CEO Alan Joyce receiving almost $80 million since 2012 and a $287,000 pay bump.

Qantas share price snapshot

In the last year, the Qantas share price has fallen 3.5% but has managed to gain 12% in the past month.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 8% in the past year and is 3% lower in the last month.

Qantas has a market capitalisation of $9.88 billion.

Qantas shares are currently trading at a price-to-earnings (P/E) multiple of around eight times.

The post While the Qantas share price is stalling, Rex is surging 5%. What's happening? appeared first on The Motley Fool Australia.

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Rex shares closed at $1.40 each at the conclusion of Wednesday's session, flat on where the company closed at yesterday, but above the $1.35 price that Rex opened at this morning.

What did the company report?

• Group revenue total of $319.2 million, up 24.6% on FY21's $256.1 million
• Fuel costs of $65.4 million, up from FY21's $24.8 million
• Statutory loss before tax of $68.3 million, up from the loss of $7.2 million in FY21
• Statutory loss after tax of $461 million, up from the loss of $3.9 million in FY21
• No dividend declared due to operating loss.

What else happened in FY22?

It was a tough year for Regional Express, given COVID-19 lockdowns and a surging oil price making fuel more expensive.

However, the company did clock a few positive developments, with Rex launching the Brisbane leg of the 'golden triangle' of Sydney, Brisbane, and Melbourne routes late last year.

The company also received a "multimillion dollar grant" under the NSW Jobs Plus program. This is helping Rex to fund new flight simulators at its headquarters, as well as a new hangar at Sydney Airport.

Regional Express was also re-awarded a 12-year contract with Ambulance Victoria that will commence in 2024.

In a sign of the ongoing disputes between Rex and its larger rival Qantas Airways Ltd (ASX: QAN), Rex blamed the June "cessation of services to Cooma from Sydney" on "Qantas' predatory behaviour".

But Regional Express also trumpeted the new services from Melbourne to Devonport, stating it will "end Qantas' 17-year monopoly of the route".

What did management say?

Here's some of what Regional Express chair Lim Kim Hai had to say on these numbers:

Considering that COVID devastated practically three quarters of the FY and the war in Ukraine starting in February causing crude oil prices to skyrocket by over 70% during the Financial Year peaking at a near record high of A$174 per barrel in June 2022 as well as other supply shocks on the international economy, I am mildly pleased that our performance is not much worse than it is.

The operational statistics for the new Financial Year have been very encouraging and indicate that we have turned the corner.

We are continuing to see very strong bookings in August with the past week showing a 50% increase over the same period in July last month. Barring further external shocks, I am confident that the Group will return to good profitability in FY23.

What's next for Rex?

As Lim stated, the company is now eyeing a return to profitability in FY23. He pointed out that falling oil prices in recent weeks will be a boon for the company in this endeavour.

In addition, it was mentioned that "we have every reason to believe that the performance will get stronger in the coming months".

Rex share price snapshot

The Rex shares have been lacklustre, albeit market-beating, performers in 2022 thus far.

Regional Express shares are now down around 3.5% year to date. But the company is still in the green over the past 12 months, giving investors a gain of just over 13%.

The ASX airline operator has a market capitalisation of $154.2 million.

The post The Qantas factor: Rex shares hold steady despite deepening loss appeared first on The Motley Fool Australia.

At the time of writing, the regional airline operator's shares are soaring 6.02% to $1.41.

This trump shares in rival Qantas Airways Limited (ASX: QAN) which is heading the other way, down 1.51% to $4.57.

Let's take a look at how Regional Express is performing lately.

Regional Express kicks off FY23 with record results

A robust start to the new financial year is steering investors to bid up the Regional Express share price this afternoon.

In its release, Regional Express advised it has achieved record passenger numbers and revenue across its entire network for the first month of FY23.

On the domestic front, the company's July pre-audited base passenger revenue came to $13.6 million. This is almost double the monthly average of $6.87 million from the prior three months. The load factor stood at 86% across the domestic network.

Looking at the regional division, Regional Express stated that July's revenue and passenger numbers were almost identical to July 2019. Between the two comparative periods, there was around a 4% reduction from last month.

Despite the small cut, revenue per flight and the passenger load factor both increased by 8% and 7%, respectively.

What did Regional Express comment with?

Regional Express executive chair, Lim Kim Hai upped the ante with its war against Qantas, saying:

Our great performance in the regional markets also validates our decision to stand our ground against Qantas, which flooded the market on marginal regional routes in an attempt to destabilise us. Not only did their plan not succeed, but we are now having record passengers and revenues on our regional network by concentrating on the larger regional routes in direct competition with them.

Later this month we will commence servicing Melbourne-Devonport, breaking QantasLink's monopoly on the route for the last 17 years and we intend to fly to other regional cities that are currently monopolised by QantasLink.

Hai went on to further add:

Our unparalleled reliability has resulted in many new passengers on top of the corporate and travel agency ones, and, barring further external shocks, has led us to believe that both our domestic and regional operations will be profitable this FY. This is quite a feat, considering that we only properly restarted domestic operations in February this year.

…Rex is the only airline in Australia, and perhaps only one of five in the world that has not made an operational loss since 2003 up to COVID. Our best-of-class operations are without dispute. With such financial and operational prowess, we look confidently ahead in this FY as we turn the corner on these devastating COVID years.

Regional Express share price snapshot

Since the beginning of 2022, the Regional Express share price has moved in circles to post a loss of 2%.

Its shares hit a 52-week low of $1.005 on 20 June after investors headed for the exits after global markets tanked.

Nonetheless, Regional Express shares are making a stunning recovery – up more than 40% for the past 6 weeks.

Based on today's price, the company commands a market capitalisation of approximately $135.49 million.

The post Why is Rex smashing the Qantas share price on Tuesday? appeared first on The Motley Fool Australia.

Rex has agreed to acquire National Jet Express (NJE) – the regional services arm of Cobham Aviation Services Australia – for $48 million.

At the time of writing, the Rex share price is $1.27, 4.53% higher than its previous close.

Let's take a closer look at the company's previously speculated acquisition.

Rex announces $48m FIFO acquisition

The Rex share price is rejoicing during a disappointing day for most ASX shares after the regional and domestic airline announced a major acquisition.

The company, its joint venture partners, and its chair are joining forces to acquire NJE.

NJE is a leading provider of FIFO services in Western Australia and South Australia, operator of freight services between many of Australia's capitals, and provides charter services to Papua New Guinea.

It brought in $142 million in revenue in 2021. The business also brings eight Bombardier Q400 turboprops and six Embraer E190 jets to the table.

The Rex share price had been frozen since Tuesday as the company prepared to announce its latest acquisition.

Rex executive chair Lim Kim Hai said the "completely modern fleet" represents greater fuel efficiency, operational reliability, and lower emissions than competing FIFO airlines. He continued:

With this acquisition, Rex will have a FIFO arm that is simply unparalleled in Australia.

NJE will naturally be the partner of choice for resource companies all over Australia who have been crying out for so long for a FIFO provider that is able to address their triple priorities of minimal impact on the environment, comfort and safety of its staff, and reliability of service.

Rex will fund 50% of NJE's purchase price, drawing an extra $15 million under its debt facilities to do so. The remaining 50% will come from its joint venture partners, one of whom is Rex's chair.

The company's chair will be putting their private funds towards the acquisition. They will convert that debt funding to issued new shares in NJE to reduce Rex's debt burden.

The joint venture is also planning to modernise the business' aircraft and technology offerings to expand its FIFO services into Queensland and the Northern Territory.

Rex share price snapshot

Today's gain hasn't been enough to boost the Rex share price into the longer-term green.

The airline's stock is currently around 10% lower than it was at the start of 2022. Though, it has gained 5% over the last 12 months.

The post 'Simply unparalleled': Rex share price defies downturn on FIFO acquisition appeared first on The Motley Fool Australia.

This comes after the company requested a trading halt at market open.

As such, the airline operator's shares are frozen at $1.215.

Why are REX shares in a trading halt?

The Regional Express share price entered a trading halt this morning pending an important announcement from the company.

In a statement to the ASX, Regional Express advised it is preparing to make a material announcement.

While the company has provided no further details, speculation is rife on what the release could be.

Regional Express states its shares will remain in a trading halt until an official announcement is made or trade commences on Friday 15 July.

Just yesterday, Regional Express responded to recent news articles regarding its interest in acquiring Cobham Aviation's fly-in-fly-out (FIFO) operations.

The news sent Regional Express shares as high as $1.25 on the day before backtracking as the broader S&P/ASX 200 Industrials Index (ASX: XNJ) fell (0.37%).

Investors appear to be bracing for the June inflation report to come out of the United States tonight. In addition, the US domestic jobs data is due to come out on Thursday. This will give a clearer picture of the health of the United States economy.

Regional Express share price summary

Since this time last year, the Regional Express share price has moved in circles.

However, in 2022, the company's shares paint a different picture for investors, down almost 12%.

Regional Express presides a market capitalisation of $133.83 million with approximately 110 million shares on its registry.

The post Why is the Regional Express share price in a trading halt today? appeared first on The Motley Fool Australia.

The company's shares are currently swapping hands at $1.215 each, a 0.41% gain. For perspective, the Flight Centre Travel Group (ASX: FLT) share price is down 1.81% today, while Qantas Airways Ltd (ASX: QAN) shares are down 3.08%.

Let's take a look at what is happening at Regional Express.

Media speculation response

Regional Express shares entered a trading halt briefly today, pending further news The company then emerged from the freeze with a response to recent media speculation.

The airline revealed it is hoping to acquire Cobham Aviation Services' fly-in, fly-out (FIFO) operations.

In a statement authorised by company secretary Richard Kwan, Regional Express said:

Rex discloses that it is one of the interested parties involved in the acquisition process.

No agreement has been reached for the acquisition of Cobham.

This follows media speculation in the Australian Financial Review that Rex is "one of the last parties standing" for Cobham's FIFO business.

In June, Regional Express advised weekly services have increased by up to 67% in eleven regional cities.

Regional Express said it will inform the market if the acquisition goes ahead.

Share price snapshot

Regional Express shares slipped 2% in the past year, but they have dropped nearly 12% year to date.

In the past month, the company's share price has gained 8%. In the last week, Regional Express shares have climbed more than 2%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has shed nearly 10% in the past year.

The airline has a market capitalisation of about $133.9 million based on today's share price.

The post Regional Express shares hold steady amid response to fly-in fly-out takeover speculation appeared first on The Motley Fool Australia.

Regional Express shares are currently trading at $1.07, a 2.88% gain. Meanwhile, the company's larger rival Qantas Airways Limited (ASX: QAN) has seen a 1.4% drop in its share price so far today.

Let's take a look at what is going on in the travel world.

Regulation battle

Regional Express requested help from the New South Wales Government to regulate regional flight routes but was reportedly knocked back, The Australian reported.

Had Regional Express been successful, airlines, including Qantas, would have had to bid via a tender process for these country flight routes.

Commenting on the news, a spokesperson for Regional Express told the publication:

The only airline that enjoys the benefit of regulated routes in NSW is Qantas.

In late May, Regional Express withdrew regional flights routes to Bathurst, Grafton, Lismore, Kangaroo Island, and Ballina.

At the time, Regional Express chair John Sharp blamed the decision on Qantas' "predatory actions". However, Qantas hit back, claiming:

This is just the latest example of Rex blaming Qantas and others for decisions that by its own admission it has made "to look after itself".

In mid-June, Regional Express announced it would increase weekday services to major regional centres including Albury, Broken Hill, Coffs Harbour, Dubbo, Orange, and Port Macquarie, among others.

Qantas has launched more than 40 new regional flight routes since April 2020. Meanwhile, Regional Express has commenced multiple new interstate flights.

ASX travel share price recap

The Qantas share price has gained nearly 1% in the past year, while the Regional Express share price has lost around 11%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has shed around 8% in the past year.

Qantas has a market capitalisation of $8.6 billion while Regional Express has a market cap of around $116 million.

The post Why this smaller ASX travel share is locking horns with Qantas over regulation appeared first on The Motley Fool Australia.

The industry got a vote of confidence today after Regional Express Holdings Ltd (ASX: REX) announced a 10-year agreement with Flight Centre Travel Group Ltd (ASX: FLT).

Additionally, Rex revealed it has also signed agreements with ASX travel shares Helloworld Travel Ltd (ASX: HLO), Webjet Limited (ASX: WEB), and Corporate Travel Management Ltd (ASX: CTD), plus Consolidated Travel.

ASX travel shares team up

Revealing its "multiple agreements with major travel agency groups", Rex picked out one deal for special mention.

"In particular, Rex has signed a landmark 10-year agreement with Flight Centre which ensures that Rex will be Flight Centre's partner of choice over the next decade," it said.

Rex said all the agreements will be in effect at the start of the new financial year beginning July 2023.

The ASX travel share expects the deals to result in a "more than doubling of Rex's annual domestic jet revenues in FY2023 compared to its current annualised domestic jet revenues with no increase in fleet size".

It also expects its regional revenue to be improved.

Speaking on the announcement, Rex's general manager of sales Ann Elliott said the new partnerships were "critical to success".

"These new partnerships are a testament to our growing reputation as a safe, reliable and affordable full-service airline which is enjoying ever-increasing passenger support," she added.

Share price snapshot

At the time of writing, the Rex share price is up 0.99% at $1.02. It is down almost 28% this year to date and 18% over the past year.

The Flight Centre share price is currently down 1.15% today at $17.24. It has fallen 7% since the start of the year but is up 15% over the past 12 months.

The post These 2 ASX travel shares are tying the knot for the next 10 years appeared first on The Motley Fool Australia.