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Rex has reversed its decision to cut five regional routes at the heart of its row with Qantas over network expansion.
The airline said it could continue the flights because the federal government extended the ‘RANS’ and ‘DANS’ supplemented routes initiative for a further six months.
The U-turn comes after Qantas and Rex have been involved in a weeks-long slanging match over the flag carrier’s “predatory” decision to launch services previously exclusive to Rex.
The row between the two airlines began in February when Rex said it was to discontinue 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.
These have now been reinstated.
At the time, Rex also 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).
Outlining his case at a Senate committee, Rex deputy chairman John Sharp said the routes Qantas are moving to are too small for them to make a profit on.
“Albury to Melbourne, which Rex has been operating solely for the last many years, since April of last year has only had 880 passengers on that route,” said Sharp. “In the month of August last year only nine passengers in the whole month travelled from Melbourne to Albury on an airline — our airline in this case.
“From looking at those numbers, you wouldn’t support one airline, let alone two. They’re tiny. They’re miniscule numbers. So the evidence that you can draw on from those passenger numbers would indicate that Qantas is moving into those routes not to make a profit—because you can’t; there’s no way in the world you can with those small numbers.
“They’re doing it because they want to swamp us, to push us out of our traditional marketplace and to hurt us financially so that that in turn hurts us in our expansion into the domestic market.”
However, the day after Sharp’s first made these comments, ACCC chairman Rod Sims backed Qantas at a separate hearing of the same Senate committee.
“If Qantas has the aircraft, it’s incurring the fixed costs, it realises it can make a cash contribution by flying somewhere – it’s a bit hard to call that predatory,” he said.
Despite the argument, Qantas ploughed on and formally launched flights on some of the disputed routes, and Rex itself continued with its own plan to launch capital city routes.
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.
Warwick
says:Obviously Sharp’s decided to back-peddle because the ‘golden triangle’ flights’ Rex is operating aren’t the ‘money spinners’ he expected them to be,
so he’s got to get income from somewhere.
Still reckon he’ll pull out of east coast routes’ by Xmas 2021.
Iain
says:So Rex decide to continue these routes after they get MORE free money from the government!!!
How about a Royal Commission into this.
AgentGerko
says:QF is a joke. There is an enormous difference between flying the (pre-covid) second busiest air route in the world in Sydney – Melbourne and Sydney – Merimbula’s twice daily 34 seater. It’s like comparing New York to Washington with Petticoat Junction to Hooterville. If all these routes are so clearly profitable to QF then why have they waited until now to fly them? Sorry but Rod Sims is an idiot if he doesn’t recognise that this is a predatory attack by Qantas.
Ben
says:Ahhh so now we have the real story here! It’s not about Qantas at all (we already know that, after all QF only competes on the ADL-KSC route), it was all about the RANS drying up meaning that these routes were already borderline anyway. The airline should be honest and just say that they can’t keep these routes up in the lean post COVID environment and they will go if not supplemented. After all we are going to have the exact same situation when RANS finally expires as I can’t see Rex not still being very financially stretched nor the regional passenger numbers having a massive recovery. I do wonder who Sharp is going to blame next time?
Brent
says:You don’t have to wonder, Ben, ‘cos Sharp will still continue to blame QANTAS, as it’s his competitor.
The fact that he’s decided to infiltrate QANTAS’ main ‘golden triangle’ routes’, Sharp sees that as a ‘right’.
Sharp’s usual ‘mouthing off’ has gone very quiet about flying to/fro BNE. There’s something ‘fishy’ about that. Surely it’ll be revealed eventually.
Peter north
says:Well done rex keep up the good work.
Bob
says:Hahaha classic Rex. Cries poor and claims predatory behaviour from Qantas.
What did you expect when you announce you are entering into their biggest money maker? Let them sit back and take it with out recourse?
Kim
says:You go into Q’s air space, you had to expect they would come into yours.
It only fair
Teiemka
says:How ironic all this coming from the Former Minister for Qantas. 🙂
Gisela Robinson
says:When do they learn we are humans and not moneypools Gisela Robinson, Kangaroo Island