Rex closes in on ‘abandoned’ Virgin routes

written by Adam Thorn | September 24, 2020
A file image of a Regional Express (Rex) Saab 340B (Seth Jaworski)
A file image of a Regional Express (Rex) Saab 340B (Seth Jaworski)

Rex has revealed it’s now in advanced discussions to launch flights to a number of cities it says have been “abandoned” by Virgin’s decision to trim its network, including Port Macquarie and Canberra.

The update comes after Virgin recently revealed it would stop flying to a number of regional destinations including Albury, Tamworth, Hervey Bay, Mildura and Cloncurry. It meant some faced having only one carrier providing services.

Rex’s general manager for network strategy, Warrick Lodge, said on Thursday, “Rex has been in discussions with community leaders and government representatives desperate for an airline to fill the gap left by Virgin Australia.

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“These communities are concerned about being left with a monopoly airline and the impact this could have on flight schedules and fare pricing, particularly when their local economies have already been hit hard by the COVID-19 pandemic.”

However, the bullish statement went on to reveal that it wouldn’t consider serving cities “such as Tamworth, which insist on charging security screening charges on carriers not legally required to be screened”.

In 2019, the federal government paid $50 million to buy screening equipment for 64 terminals in regional Australia, however, didn’t cover the cost to pay for the staff who operate them.

This has led to the controversy of some airports apparently choosing to pass that cost onto carriers or consumers.

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A Senate inquiry subsequently ruled there was “considerable danger” that regional airports would be forced to close over the issue.

“As regulations dictate that security screening is not required for Rex’s aircraft, Rex calls on all local government to avoid imposing unnecessary security levies at regional airports that will ultimately be passed on to passengers by way of increased ticket prices,” said Lodge.

“We need to rebuild passenger numbers back to pre-COVID levels and imposing unnecessary security costs on to ticket prices will work directly against that process.”

Rex’s latest release comes after it asked for expressions of interest from towns and then declared it considered itself to be “without peer in the world of regional aviation”.

Separately, the airline is also in advanced negotiations with an APAC investment firm to secure $150 million so it can launch flights between Sydney, Melbourne and Brisbane in March next year.

The deal would see PAG Asia Capital initially invest $50 million in secured convertible notes that could allow it to hold 23 per cent of Rex’s shares by December.

Rex’s executive chairman, Lim Kim Hai, said, “With PAG’s support, I have every reason to believe that Rex can successfully launch its domestic major city jet operations.”

The airline first announced in May, its ambitious plans to take on Qantas and Virgin by expanding its network to service Australian capital city routes and speculation later linked the airline to the lease of 10 Boeing 737s from Virgin Australia.

The 10 flight routes axed by Virgin earlier this month are:

  • Melbourne–Mildura
  • Brisbane–Port Macquarie
  • Brisbane–Cloncurry
  • Mount Isa–Cloncurry
  • Sydney–Albury
  • Sydney–Uluru
  • Sydney–Hervey Bay
  • Sydney–Port Macquarie
  • Sydney–Tamworth
  • Sydney–Nuku’alofa, Tonga

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11 Comments

  • Ronald Spencer

    says:

    Once Bain strips all Virgins assets Rex will have all the routes

  • Patrickk

    says:

    Interesting that Virgin is ‘trimming’ Canberra.

  • Peter

    says:

    Great news. Pity TMW not included. That leaves only QF,LIKE MRZ. higher fares gtd.
    Once QF wanted $1462 o/w MEL/MRZ.
    .

  • AgentGerko

    says:

    I personally avoid Rex when possible, not due to service quality but because of their small and slow Saab 340s. I know on many lesser routes this aircraft is ideal but on busier routes where it competes with other carriers the Saab is not in the hunt compared to QF’s Q400’s. Take a route like Sydney – Ballina. You can fly a Jetstar A320 in 75mins gate to gate (the one time I’d make JQ my first choice). You can take a QF Q400 in 80mins. So who would choose a bumpy 105mins in a Rex Saab? But I wish them well. Taking on Qantaslink head to head takes guts.

  • Thomas Mercer

    says:

    Tired aeroplanes – tired argument.

  • AlanH

    says:

    If Rex are willing (finally) to resume flights to CBR are they only thinking of SYD-CBR and MEL-CBR or will they link CBR to other regional destinations such as Albury, Dubbo, Moruya and Merimbula?

  • Chris Iseppi

    says:

    Virgin also axed Bundaberg so to Alliance so Bundaberg will be at the mercy of Qantas prices….back to being used as a cash cow….I wonder how much the Bundaberg council charges airlines to use our airport

  • Charles Smith

    says:

    Fabulous, just when we need stability in the industry post COVID, instead here we go again with competition for its own sake, driving prices to unsustainable levels, placing pressure upon those of us delivering the service. Well done deregulation! While the staff delivering a safety-sensitive product have their wages and conditions compromised (see 40% wage reductions speculated at the “new” Virgin) the bosses get richer and richer! Just take a look at the wealth of the recent CEO’s of the majors, and compare that with the wealth of the MD’s etc pre deregulation. I doubt Sir Reginald or the fabulous founders of Qantas would be impressed. In fact we know they wouldn’t. And we know they would not have sat idly by while health bureaucrats et al completely ruined our beloved industry! And, while the price of goods in nearly every other aspect of commerce increase, why does the the price of an airline ticket have to go down? Squeezing margins to the extent “modern” aviation (a safety-sensitive industry) endures, makes absolutely no sense. Someone please explain that? If you want cheap transport, catch a bus!

  • FlyingFez

    says:

    PatrickK, probably because nearly all CBR-SYD and some off peak CBR-MEL were flown with the ATR72s that are leaving the fleet. They wouldn’t fill enough 737s to maintain the same frequency without losing money – QF use (or did, pre Covid) 717 and Q400s for all CBR-SYD services.

  • In answer to AGENTGERKO, maybe people who enjoy flying would actually choose the 105 mins in a Saab 340B, spent while travelling at a TAS of 8 km per minute.

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