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Rex Oil is planning to buy Australia’s National Jet Express

Rex announced that National Jet Express will be operated independently of mainline airline as part of a proposed takeover.

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Rex, an Australian regional specialist, is nearing completion of its transition into FIFO charter services. Rex’s acquisition of National Jet Express has received official permission from the Australian Competition and Consumer Commission, leaving just the Foreign Investment Review Board to provide its seal of approval.

According to Rex, the NJE turboprops and jets are the best for FIFO.

Eight Q400s from Cobham Aviation will be transferred to Rex as part of the NJE acquisition. Cobham Aviation Services, in picture

Executive Chairman Lim for Rex According to Kim Hai, who spoke to Flightglobal, the takeover should be completed by September, and the [FIFO] business will maintain its branding and not use the Rex name to fly. Insofar as the customer-facing portion is concerned, it will be “operated autonomously,” he continued. The requirements of FIFO operations, which frequently call for services to outlying airstrips with varied types of runway surfaces, are best met by the Q400 and E190 aircraft. Dash 8 and E190 aircraft from NJE are “the best, most modern aircraft that fly-in, fly-out consumers would need,” according to Lim.

This is a reference to the Fokker 100s operated by FIFO rival Alliance Airlines, which Qantas is in the process of purchasing. When compared to the mostly 40-year-old Fokker 100s used by the other main FIFO operators, Lim stated in July that “both aircraft types [Q400/E190] are fuel efficient, have enhanced operational reliability, and low carbon emissions.”

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Fighting to dominate the FIFO charter market are Qantas and Rex.

Alliance Airlines has established a FIFO charter business in Australia, and Qantas is eager to acquire it. Alliance Airlines, in picture

In order to persuade the ACCC that its acquisition of Alliance won’t significantly reduce airline competition in the FIFO sector, Qantas will have a difficult time. Given that the Qantas-Alliance business will start with around a 70% share of the FIFO market, the deal’s success is not certain. The ACCC notified Rex in late July that it did not object to the NJE acquisition and “does not intend to conduct a public review of the proposed transaction.” Lim has the final word, saying, “When there is no choice, there is no choice; nevertheless, when there is a choice, I guess that would be very evident what they would do.”

There’s more to play out in this conflict for the FIFO market because Qantas and its CEO Alan Joyce are known for pursuing their goals aggressively.