Qantas chief executive Alan Joyce has attacked Rex for accepting $60 million in government handouts and then unveiling plans to expand its network to fly between Sydney, Melbourne and Brisbane.
“That doesn’t feel right,” said Joyce. “That doesn’t seem right.”
This week, the regional carrier announced a full-year underlying profit before tax of $250,000 and an increase in revenue, despite the coronavirus crisis.
It marked a remarkable turnaround from March, when Rex warned it would have no choice but to announce the “shutting down of its network” if it didn’t receive financial aid from the government, even threatening to stop transporting COVID-19 testing samples.
Then, in May, after it received its effective bailout, the business announced ambitious plans to take on Qantas and Virgin by expanding its network to service Australian capital city routes.
The regional carrier later confirmed to the ASX that it intends to have its new network up and running as soon as March 2021, and was confident of securing funding.
Speculation later linked the airline to the lease of 10 Boeing 737s from Virgin Australia.
But Joyce, speaking at CAPA’s virtual Australia Pacific Aviation Summit on Wednesday, shot down his rival’s apparent bravado.
“They should not be using government subsidies to fund growth,” Joyce said. “When we set up Jetstar in 2003, it was $120 million to set up an airline. To set up an airline is quite an expensive thing, so I hope they’ve done their numbers correctly.”
Rex’s ability to ride out the coronavirus storm compares well with Qantas, which blamed a “near-total collapse in travel demand” for recording a statutory loss before tax of $2.7 billion for the last financial year.
Just last week, the flag carrier and announced nearly 2,500 more jobs are at risk because the business plans to outsource its remaining ground handling operations.
The proposed cuts, in addition to the 6,000 already announced, would include 370 job losses at Jetstar and more than 2,000 at Qantas.