Rex has announced it’s to rapidly expand its 737 capital city network to operate twice-daily services to both Adelaide and the Gold Coast in a month’s time.
The regional carrier will commence services between Melbourne and Adelaide from 31 March, and then from the Victoria and NSW capitals to the Gold Coast on 29 March and 1 April, respectively.
Rex made the surprise announcement on the day it entered the battle for the golden triangle, with VH-RQC departing Melbourne at 7:21am as flight ZL18 and landing at 8:25am in Sydney.
Adelaide Airport managing director, Mark Young, said the new route would provide customers with “lower prices, more choice and better services”, and Queensland CEO Chris Mills hailed the “improved connectivity on the Gold Coast’s two busiest routes”.
Tickets are on sale now and prices are currently:
- Melbourne to the Gold Coast from $79 economy and $349 business;
- Sydney to the Gold Coast from $69 economy and $299 business class; and
- Fares for Melbourne to Adelaide from $69 economy and $299 business class.
The airline launched services between the NSW and Victorian capitals today and plans to operate nine return services a day between the two cities, with sale prices starting at $49.
Economy tickets will include checked baggage, food and pre-assigned seating – indicating Rex will pursue a ‘mid-market’ hybrid strategy.
The expansion is being financed by a $150 million investment from PAG Asia Capital, which was only signed off by shareholders in January. The pair first revealed they were in advanced negotiations in September 2020, after Rex announced its capital city ambitions in May 2020.
The news Rex is growing out its 737 network also comes a week after the business and Qantas became involved in an extraordinary public slanging match over routes.
Rex said it was axing five regional routes because of the flag carrier’s “predatory” move to compete with it on eight separate services. Qantas responded by saying Rex was having a “tantrum” and argued it only operated on one of the discontinued routes.
“Rex’s idea of competition is that it’s something that happens to other people, because they believe they have an enshrined right to be the only carrier on some regional routes,” Qantas said.
The row began when Rex said it was to cut five regional routes when the government-supplemented financial help expires at the end of March: Sydney–Bathurst, Sydney–Cooma, Sydney–Lismore, Sydney–Grafton and Adelaide–Kangaroo Island.
However, it blamed the decision to axe these routes on Qantas, choosing to compete with it on eight separate routes (Sydney—Orange, Sydney–Merimbula, Sydney–Griffith, Melbourne–Merimbula, Melbourne–Albury, Melbourne–Wagga Wagga, Melbourne–Mount Gambier, Adelaide–Mount Gambier).
Rex’s deputy chairman, John Sharp, said, “All of these routes have only supported one regional carrier in the past, and the current monthly passenger numbers are laughable. Even when passenger numbers return to pre-COVID levels, these routes would still be unable to viably support two carriers.
“Qantas has clearly embarked on a deliberate strategy of moving into Rex’s routes that can only support one regional carrier in an attempt to intimidate and damage Rex in its traditional regional market, hoping that Rex would be a less formidable competitor in the domestic market.
“Qantas is making record losses during COVID and has received an estimated $1.2 billion in Commonwealth assistance to stay solvent but, despite this, feels it is appropriate to use taxpayers’ funds to finance the losses on new services whose sole objective is to weaken the competitor.
“The Rex board has decided to stand its ground in these routes even if inevitably both carriers will be making significant losses. Unfortunately, the expected drag on Rex’s financial position from the losses on the above eight routes will mean that Rex will be unable to continue subsidising marginal routes that we have serviced for the past 20 years.”
Rex said it would launch new routes “to ports where Virgin Australia has retreated, leaving Qantas as the sole or dominant operator”. This included Coffs Harbour and Port Macquarie initially, with the potential to add Sydney–Tamworth, Perth–Geraldton, Melbourne–Devonport and Sydney–Canberra.
Qantas responded by branding the announcement “a classic Rex tantrum”.
“The fact is Rex is receiving millions of dollars in bespoke government assistance for its regional operations at the same time as it’s acquiring new aircraft to fly between capital cities,” said the business in a statement.
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