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.
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.
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