Rex deputy chairman John Sharp has said Qantas is secretly “distressed” at his airline’s plans to fly capital city routes despite publically belittling its chances.
In a bullish newspaper column, Sharp appeared to compare the national carrier to the Titanic and said the real reason for chief executive Alan Joyce’s strong comments were to make customers think Rex and Virgin could collapse.
The tit-for-tat response comes after Joyce told Australian Aviation in December that the regional airline’s “limited network” and higher ticket prices would hold them back.
Rex will start flying between Sydney and Melbourne on 1 March, with plans to expand flights to Brisbane by Easter.
It marks the first major new competitor for the so-called Golden Triangle in two decades.
“His prediction of failure for either Rex or Virgin is designed to undermine them by casting doubt over their survivability, steering passengers into the arms of Qantas because, according to Joyce, it’s the only airline guaranteed of longevity and the only safe place to book a ticket,” wrote Sharp in the AFR.
He went on to accuse Qantas, which he called a “600-pound gorilla”, of repeatedly getting lucky in its history, with Ansett’s collapse and Virgin’s poor financial performance.
“Joyce was appointed CEO of Qantas in November 2008, at the same time the GFC struck,” wrote Sharp. “This could explain his nervousness today as he has presided over a 12-year period when Qantas lost cumulatively, arguably not entirely his fault, $300 million.
“It would have been a bigger bloodbath if Virgin Australia had not given Qantas a free kick by being the basket case it was during that period.”
He said Rex’s entry into the market was a wake-up call and defiantly said there is a “new game in town”.
“Joyce took comfort from history in his prediction. From the Titanic to Pan Am to Kodak to Nokia to General Motors, the world is littered with what was believed to be too-big-and-too iconic-to-fail,” wrote Sharp. “In today’s warp-speed world, those who constantly rely on history may soon find themselves being part of it.
Sharp’s thundering quotes come after Alan Joyce told Australian Aviation in December that he was “very confident” Qantas could hold its increased 70 per cent after the pandemic subsides.
“Rex are talking about a staged approach into the market,” said Joyce. “We’re very confident in our position, Jetstar will still have a significantly lower cost base because it has scale advantages over Rex.
“Jetstar is offering lower air fares than Rex, even today when they launched. And we do believe from the business market, Rex’s network is extremely limited and the business corporate market is going to be still very attractive to the proposition Qantas has.
“Qantas as an example is opening up 30 of its 35 lounges domestically, before Christmas. Our next major competitor has only six lounges and there’s question marks over some of them.
“Qantas loyalty program has been announcing a number of announcements in the last few weeks about maintaining people’s status, which is being well received, and matching status on other airlines, which we’ve had thousands of customers respond to.
“And we can see with Jetstar, certainly with Tiger removed from the market, that the low-cost market is moving towards Jetstar, too. So we also believe that there’s been a big strategic advantage for Qantas by having a bigger network of more frequencies.”
Last year, Rex confirmed it would initially operate nine return services a day between Sydney and Melbourne, with sale prices starting at $79. Economy tickets will include checked baggage, food and pre-assigned seating – indicating Rex will pursue a ‘mid-market’ hybrid strategy.
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