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Rex deputy chairman John Sharp has revealed one of its exclusive routes that Qantas is moving into has seen an average of just 82 passengers a month for the past year.
Sharp used an appearance at last week’s Senate committee to break down his opposition to the flag carrier’s network expansion in detail, arguing it was “simply an exercise in intimidation”.
His comments come weeks after the two airlines first became involved in a public slanging match over networks, resulting in Qantas suggesting Rex was having a “tantrum”.
Sharp was speaking at the fourth hearing of the Senate committee examining “the future of Australia’s aviation sector, in the context of COVID-19 and conditions post-pandemic”.
It’s designed as a forum for top industry figures to discuss how the pandemic has affected the industry and to examine how it can best recover.
While it took place last week, a detailed transcript has only just been released.
Outlining his case against Qantas launching flights on previously Rex-exclusive routes, Sharp said, “The regional routes that they’ve chosen are pretty much all routes that Rex operates too. Some of them are very small routes.
“I notice they claim that Qantas is doing this because they intend to make a profit from it. They see pent-up demand in the marketplace, justifying their decision to move into these markets that Rex has been operating into.
“But the markets that they’re operating into are small, and we’ve had very low passenger numbers in them over the last 10 months since COVID came into effect.
“I will take a few routes they’re moving into here. 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. 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.
“If you go to Mount Gambier, where Qantas has also moved, Mount Gambier to Melbourne since April of last year has only had 825 passengers in 10 months—82.5 passengers a month on average. And there’s Wagga to Melbourne, with 920 passengers in a 10-month period. These are routes that Qantas has moved onto because, they claim, they’re going to make a profit from them and there is pent-up demand that justifies their decision to go there.
“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. So, we do have that risk from being swamped by the larger airlines, like Qantas.”
The comments don’t appear to take into account the effect of numerous COVID lockdowns, which effectively shut off Melbourne Airport to regular commercial travel for months.
The day after Sharp’s first made these comments, ACCC chairman Rod Sims backed Qantas’ network expansion against Rex’ earlier claim they were predatory.
Speaking at a separate hearing of the same Senate committee, Sims said, “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.”
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.
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).
Despite the argument, Qantas ploughed on and formally launched flights on disputed routes between Sydney and Griffith, and Melbourne and Merimbula.
Rex also continued with its plans to launch flights between Sydney, Melbourne and Brisbane, and then extended its capital city network to include the Gold Coast and Adelaide.
Finally, yesterday, Qantas announced that from 1 July it would step in and fly Sydney and Cooma – one of the routes Rex claimed it pulled out of because of Qantas.
