Latest / What the Flux / Rex Airline's $80m ticket to fly | Aristocrat Leisure's pivot | Vittoria's freshly brewed court win

Transcript

Rex Airline's $80m ticket to fly | Aristocrat Leisure's pivot | Vittoria's freshly brewed court win · What the Flux

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  Speaker 1: This is what the Flux. I'm Brett and I'm justin
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  Speaker 1: and Wednesday, the thirteenth of November. Jes it. Wait, we
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  Speaker 1: know there has been a big drop in cash transactions
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  Speaker 1: in Australia. However, the actual number of banknotes in circulation
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  Speaker 1: is near record highs if you don't mind, but there
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  Speaker 1: is a reason for this. The RBA reckons only well
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  Speaker 1: nine to twenty six percent of the cash is used
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  Speaker 1: for transactions, pretty broad and up to eighty percent of
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  Speaker 1: banknotes are hoarded for a rainy day, and up to
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  Speaker 1: eleven percent is used for legal activity like tax evasion
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  Speaker 1: and drugs. Everyone's got their cash under their mattress fee man,
• 0:36
  Speaker 1: uh huh that flexapp. Every single month you get slugged
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  Speaker 1: in your bank account with Netflix and Spotify and your
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  Speaker 1: gym and Photoshop and Canva and a million other things
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  Speaker 1: that you forget you signed up to. That is why
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  Speaker 1: and you can say hundreds of dollars every single month
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  Speaker 1: to make sure to download the flux app and check
• 0:59
  Speaker 1: out the subscription tracker. Three record breaking stories today, Juzzi boy,
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  Speaker 1: let's do it for our first. REX Airlines is back
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  Speaker 1: in business after receiving eighty million bucks in funding from
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  Speaker 1: the federal government. It was only ever going to be
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  Speaker 1: the government, be Man and nobody else, So tell me more,
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  Speaker 1: all right, Juzy boy. REX is short for Regional Express
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  Speaker 1: Airlines and it started in two thousand and two. Originally
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  Speaker 1: focused on forty five regional destinations as its name suggests,
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  Speaker 1: regional express, but during COVID years, REX identified an opportunity
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  Speaker 1: to compete with the big dogs and cats of the
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  Speaker 1: sky by entering the Golden Triangle that's the roots between
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  Speaker 1: Melbourne and Sydney and Brisbane. But juseboy. At the end
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  Speaker 1: of July, REX entered voluntary administration after it could not
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  Speaker 1: pay its debts. But now, be Man, the federal government
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  Speaker 1: has come to save REX. It's promised eighty million dollars
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  Speaker 1: to support them in staying alive yep. And this is
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  Speaker 1: to help keep rex's regional routes running, not the Golden Triangle,
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  Speaker 1: and it also means that REX workers will be paid
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  Speaker 1: for the first time since July. And I got to say,
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  Speaker 1: Juzi boit. This is quite convenient timing after the whole
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  Speaker 1: debuts of politicians getting preferential treatment on quantus flights. But
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  Speaker 1: been man. Ultimately, this is about driving competition in a
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  Speaker 1: market where there is very high barriers to entry and
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  Speaker 1: very low competition. So what is the key learning here?
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  Speaker 1: When competition goes on holiday, it's a commercial flying get
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  Speaker 1: a whole lot price here yees see, Jose boy. When
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  Speaker 1: a competitor leaves the market and prices jump, it ain't
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  Speaker 1: no coincidence with the number stat man well or well.
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  Speaker 1: In the last three months since Rex left the domestic
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  Speaker 1: market affairs on flights from cities like Sydney, Melbourne, bres Vegas,
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  Speaker 1: they've jumped more than thirteen percent. How's that for a
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  Speaker 1: stat But outside of capital cities the flights were largely flat.
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  Speaker 1: But the devil is in the detail because the cost
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  Speaker 1: of fuel has dropped by forty one percent and this
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  Speaker 1: hasn't been passed on to regional customers at all. Now,
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  Speaker 1: Jazi way, Since Rex cut routes to major cities, the
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  Speaker 1: number of seats actually went down by six percent. This
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  Speaker 1: led to full of flights and of course higher prices,
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  Speaker 1: and as a result, domestic airline industry has become even
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  Speaker 1: more concentrated. So despite Rex receiving eighty million bucks in
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  Speaker 1: the short term, it may still take a bit more
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  Speaker 1: time before a new airline emerges as a competitor. For
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  Speaker 1: our second story, Aristocrat Leisure, the Australian poke's machine maker,
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  Speaker 1: has sold its mobile gaming business for up to eight
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  Speaker 1: hundred and twenty million US dollars as it pivots back
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  Speaker 1: to poker machines. Nothing like pivoting back to your corby man,
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  Speaker 1: So tell me more, all right. So, Aristocrat Leisure is
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  Speaker 1: an Australian gambling machine manufacturer and they started back in
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  Speaker 1: nineteen fifty three. But it ain't just any gambling manufacturer.
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  Speaker 1: It's the largest in Australia and one of the largest
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  Speaker 1: slot machine manufacturers in the whole wide world. And Josie
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  Speaker 1: Boy well, it's been traditionally known for its old school
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  Speaker 1: slot machines. Aristocrat wanted to diversify because of slower poker
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  Speaker 1: machine growth yep. In twenty seventeen, Aristocrat went on a
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  Speaker 1: buying spree. They acquired a mobile game developer called Plarium
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  Speaker 1: for a lazy five hundred million US dollars, and then
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  Speaker 1: they acquired another game developed called The Big Fish Games
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  Speaker 1: for nine hundred and ninety million US dollars later that
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  Speaker 1: same year. And man, these are games that have in
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  Speaker 1: our purchases, but they don't require a gaming license to operate.
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  Speaker 1: But dozie boy, it's easy come, easygo, because Aristocrat is
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  Speaker 1: selling Plarium for six hundred and twenty million US dollars
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  Speaker 1: upfront and then another two hundred million US dollars if
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  Speaker 1: Playium hits certain financial targets over the next three years.
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  Speaker 1: And why are they cutting this big dog of the
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  Speaker 1: gaming world will be man, Aristocrats decided to shift its
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  Speaker 1: focus back to real money gaming markets, which are regulated
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  Speaker 1: the old strategic divestment play. So what is the key
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  Speaker 1: learning here? Strategic divestments is where a company decides to
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  Speaker 1: cut loose what no longer aligns with its long term vision.
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  Speaker 1: You see Beman. For many public and private companies, they're
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  Speaker 1: constantly assessing how to remain as profitable as possible, and
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  Speaker 1: this often means doing a review of all the main
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  Speaker 1: assets in their portfolio. This one's got high margins, this
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  Speaker 1: one's got high growth, this one not really strategic and
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  Speaker 1: not really performing. Your cut yep. Once you've divested from
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  Speaker 1: non strategic assets, you can reinvest in assets that are
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  Speaker 1: aligned with the company's core offering. Earlier this year, Treasury
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  Speaker 1: Wine Estates announced plans to divest from its cheaper wine
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  Speaker 1: brands like wolf Blasts and Yellow Glen, and similar to Aristocrat,
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  Speaker 1: these are much lower margin compared to their big dog penfolds.
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  Speaker 1: So it's out the non core and in with the
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  Speaker 1: premium wines and premium pokies. For our third and final story,
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  Speaker 1: Ossie coffee maker Vittoria has won a major court case
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  Speaker 1: against Macona over the use of a glass jar. Who
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  Speaker 1: knew a glass jar could create such emotion? What the
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  Speaker 1: coffee beans is happening here? Well, Josie boy, you might
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  Speaker 1: have seen Macona coffee in Cole's or Woolies. Yeap. They've
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  Speaker 1: supposed toly been around since seventeen fifty three and they're
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  Speaker 1: owned by the second largest coffee company in the world.
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  Speaker 1: So man Macona took Victoria to court. That's Australia's largest
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  Speaker 1: independent coffee company. Now Macona reckons that Vittoria is misleading
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  Speaker 1: customers by selling their coffee in a glass jar. Only
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  Speaker 1: we can sell in glass but Ben Man. After nearly
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  Speaker 1: two years of deliberating a quarter's found that the Vittoria
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  Speaker 1: jar is not deceptively similar to the Macona shape, and
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  Speaker 1: Victoria is claiming this is a David vers Goliath type win.
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  Speaker 1: The clearly bee Man Macona takes the shape of its
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  Speaker 1: four hundred gram trademarked coffee jar very seriously could not
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  Speaker 1: agree more. I gotta be honest, Josie boy. So I'm
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  Speaker 1: over here wondering what is the key learning a trade?
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  Speaker 1: Is it symbol or a word or a phrase that
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  Speaker 1: helps to uniquely identify a specific brand? Think Nike Swosh logo,
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  Speaker 1: the Macas, golden arches and b Man. Trade backs help
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  Speaker 1: companies build their brand recognition as well as they're loyalty
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  Speaker 1: from customers and jes boy, it's valid for companies to
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  Speaker 1: protect their trademark so others won't benefit off their good
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  Speaker 1: old fashioned hard work. For example, b Man added a
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  Speaker 1: suit forever twenty one for using its three stripe design
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  Speaker 1: on clothing. Wow yep. They claim successfully that this was
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  Speaker 1: deceiving customers into believing it was an added ass product.
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  Speaker 1: But be Man well. Macona's glass jar shade is trademarked
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  Speaker 1: Victoria's glass just isn't deceptively similar, and as a result,
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  Speaker 1: it's not trying to leverage Macona's brand and designs for
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  Speaker 1: its own benefit. Flux app if you're sipping on a
• 6:39
  Speaker 1: couple of Macona right now thinking about the pay cuts
• 6:42
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  Speaker 1: the Subscription Tracker today. Thanks for listening, and we'll see
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  Speaker 1: you on Friday.