Rex shareholders approve plan for capital city flights

Rex shareholders have voted “overwhelmingly” to approve the business’ $150 million investment to launch flights on capital city routes from March.

The airline also revealed on Friday afternoon the first $50 million from PAG Asia Capital will now be disbursed within the next fortnight.

Rex deputy chairman John Sharp said the approval was the “final major step” allowing the business to fly between Sydney, Melbourne and Brisbane with an initial fleet of six leased 737s.

“It’s a historic moment for Rex and for Australian aviation, providing Australians for the first time a premium reliable service at affordable fares,” said Sharp. “I’d like to thank all of those involved in getting to this stage. It’s been a challenging year in aviation, and to achieve what Rex has achieved is remarkable.”

Rex and PAG first revealed they were in advanced negotiations in September 2020, after Rex announced its capital city ambitions in May 2020.

The airline will 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.

The news comes after Sharp said last week that Qantas is secretly “distressed” at his airline’s plans to expand despite publicly belittling its chances.

VIEW ALL

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.

“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.”