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Rex to challenge Virgin as hybrid with business seats

written by Adam Thorn | November 12, 2020
Photographer Lenn Bayliss Rex Aviation 737 VH-VUF Wellcamp 30 October 2020 v2
Photographer Lenn Bayliss shoots VH-VUF at Wellcamp on 30 October 2020

Rex is set to challenge the new-look Virgin as a mid-market ‘hybrid’ and offer business class seats and catering when it launches flights between Sydney, Melbourne and Brisbane from March.

Deputy chairman, John Sharp, also said the airline has ambitions to launch a frequent flyer scheme and access to lounges for more expensive seats.

The news comes after Rex took delivery of the first of its new 737s, which last week was spotted by Australian Aviation having its ‘Virgin Australia’ tail branding removed.

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In an interview with Executive Traveller, Sharp said the now-regional airline is effectively a ‘full-service’ offering because it includes catering and checked luggage.

“We’ll probably carry that same level of service across into the domestic airline, which will sort of position us between a low-cost carrier and a full-service legacy airline, but the final decisions have not been made yet,” said Sharp.

Sharp also said the business will retain the 737’s eight business class seats but is not yet sure if that would be part of a traditional business-class offering.

“We’re looking at whether there’s any free access to the lounges for certain types of ticket in economy and business, as a complementary part of the package,” he added.

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Finally, Sharp said while it’s likely the airline will eventually launch a frequent flyer program, the current plan is to take the expansion “one step at a time”.

Last week Rex was forced to confirm the ex-Virgin 737 shot by Australian Aviation’s Lenn Bayliss having its tail branding removed was the very first aircraft added to its new capital city fleet.

The regional airline also publicly confirmed our second exclusive, earlier revealing how it took delivery of VH-VUF msn 34168 after it departed Wellcamp at 12:50am and landed in Sydney at 3:28pm.

Rex previously announced it was close to a deal to lease six 737-800 NG aircraft to fly its new network between Sydney, Melbourne and Brisbane, though it was unclear if they were from Virgin.

The purchase of the 737s was facilitated by PAG Asia Capital, which is set to initially invest $50 million for secured convertible notes that could allow it to hold 23 per cent of Rex’s shares by December.

Rex earlier this year recorded an underlying profit before tax of $250,000 and an increase in revenue, from $318 million last year to $322 million in FY20, despite the coronavirus crisis.

The positive results also 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, even threatening to stop transporting COVID-19 testing samples.

Meanwhie, new Virgin owner Bain is still adamant that the departure of chief executive Paul Scurrah does not mean it will be shifting away from its hybrid strategy.

Last month Scurrah announced his exit to be replaced by former Jetstar boss Jayne Hrdlicka.

His departure is significant because he was synonymous with the airline’s plan to operate as a mid-market ‘hybrid’ rather than reverting back to being a low-cost carrier like predecessor Virgin Blue.

Hrdlicka, meanwhile, also had a notoriously fraught relationship with unions in her earlier role at the Qantas Group.

Bain’s assurances seem to have been enough for the TWU, which has restarted negotiations over new working terms.

National secretary Michael Kaine said the organisation, and other unions, will go back to the table with new owner Bain after receiving information “reconfirming” the carrier’s plan to become a mid-market hybrid and not a low-cost carrier.

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8 Comments

  • Cranky Chook

    says:

    And the demise of Rex begins!! But it will not be their fault at all. Everyone else is always to blame for their mis-management and failings.

  • Trevor

    says:

    It’ll be interesting to see how long Bain’s VA lasts, with or without pointy-end seats’. I’ll be surprised if it’s still flying in two years’.
    As for Rex, it’s a case of ‘biting off more than it can chew’, taking on QF on main trunk routes’, & I know who’ll win that ‘battle’.
    The ‘grass isn’t always greener on the other side’! Guess Rex will just have to learn the hard way!
    Fools!

  • ANTON

    says:

    Why is the REX plane blank? It is supposed to be in the REX livery.

    • Adam Thorn

      says:

      We’ll know the new livery by the end of the month. At the moment, it’s just doing test flights.

      Thanks,

      Adam

  • John Hayon

    says:

    Rex I am sorry to say will go bust within two years, too many seats will be available and Qantas and Virgin will send Rex to the wall, Rex, stay with what you have.

  • Thatcher

    says:

    Rex’s ex-Virgin 737s to challenge Virgin. Ouch.

  • Brian

    says:

    The only way an upstart airline has of survival against Qantas, is for anti competitive laws to be massively tightened

  • Bernard

    says:

    Im prepared to give Rex ago when I need to fly somewhere.

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