Rex has announced it will challenge Qantas to fly Sydney–Canberra in the latest exchange in the pair’s bitter row over network expansion.
The regional carrier even accused its rival, the only carrier on the route, of “fare gouging” and said it would offer customers annual savings of up to $100 million when capacity returns to pre-COVID levels.
The news comes as the two businesses have been involved in a tit-for-tat argument over launching new services, which started with Rex accusing Qantas of using “predatory” tactics to compete with it on previously exclusive routes. The flag carrier responded by arguing that its smaller rival was throwing a “tantrum”.
On Wednesday, Rex said it would fly seven return flights a day between Canberra and Sydney from 19 April, but could increase that to 10.
The route is currently operated only by Qantas after Virgin pulled out, though Virgin does intend to restart the route soon in a collaboration with Alliance.
Qantas currently flies its larger 717s and smaller Dash 8s on the route, with fares typically starting from $193. Rex said its tickets will start at $99 one way.
Rex’s deputy chairman, John Sharp, said, “At a time when many small businesses and households are still struggling to make ends meet, our fares will make a world of difference to the community that routinely sees one-way fares close to $1,000 for this short sector.
“Rex has a war chest of $150 million funded by private equity for domestic services and we will not be deterred in our goal of bringing safe reliable air services at affordable fares to all major cities in Australia.
“We believe that on the Sydney–Canberra route alone Rex will be bringing annual savings of between $60 – $100 million to commuters when numbers return to pre-COVID levels, such is the level of fare gouging being practised.
“Rex’s affordable fares will greatly stimulate more business and leisure traffic between Sydney and the national capital as the industry continues to recover.”
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, Sharp said the routes Qantas is moving to are too small for them to make a profit on.
“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,” he said.
However, the day after Sharp first made these comments, ACCC chairman Rod Sims backed Qantas at a separate hearing of the same Senate committee.
“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.