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Rex flies Canberra and again accuses Qantas of ‘fare gouging’

written by Adam Thorn | April 19, 2021
A Rex Saab 340B, VH-RXX msn 340B-209, as shot by Victor Pody at Melbourne (YMML)

Rex has doubled down on its claims that Qantas has been overcharging customers flying to Canberra as it launched its own rival service today.

“Qantas has been gouging the domestic market and Canberra is a very good example of that,” said Rex deputy chairman John Sharp. “Qantas’ behaviour has cost the ACT economy enormously.”

The two businesses have for months been involved in a tit-for-tat argument over launching new services, which started with Rex accusing the flag carrier of using “predatory” tactics to compete with it on previously exclusive routes. Qantas responded by arguing that its smaller rival was throwing a “tantrum”.

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Today, Rex began flying from Sydney to the ACT for the first time, on the first of seven return flights each weekday. The debut service was a Rex Saab 340B, VH-ZRY msn 340B-401, which departed Sydney at 7:12am as flight ZL1813 and landed in Canberra at 7:50am.

“Australia needs Rex if it is to have competitive airline services of a high quality,” said Sharp. “Our $99 fare on the Canberra route is no different from those offered elsewhere on our network, all day and every day.”

Rex is currently selling one-way tickets for $99, which it claims is “less than a third” of the average Qantas ticket for an equivalent flight. For Thursday, 19 April, Qantas is selling direct tickets from $219 on its larger 717s and smaller Dash 8s.

Previously, the route was operated exclusively by Qantas after Virgin pulled out, though its domestic rival does intend to restart the service soon in a collaboration with Alliance.

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Rex also marked the launch of the new route by claiming its new service would provide a direct annual economic boost of nearly $200 million to the ACT.

“Rex’s entry to the Canberra airline market will add 300 jobs here and it will generate economic activity of nearly $200 million just because our competitive pricing will put a stop to Qantas’ gouging of passengers with very high prices,” said Sharp.

In response, Qantas said, “Unlike Rex, we welcome competition on the routes we fly and we’re confident in the product we’re offering.

“There has been strong competition on Sydney-Canberra until quite recently when Virgin pulled off as they went into administration. Our lead-in fares on the route haven’t changed since then and we’ve recently had sale fares for as low as $109.

“Just as we have done for decades, we will continue providing high quality and reliable service with regular flights available throughout the day between Sydney and Canberra for government, corporate and leisure travellers.”

The row between the two airlines began in February when Rex accused Qantas of uncompetitive behaviour by launching rival services on its previously exclusive routes, which it said caused it to discontinue five separate regional services. These have now been reinstated.

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.

Despite the argument, the flag carrier 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.

“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.

Rex’s expansion into Canberra follows it launching new routes to the Gold Coast and Adelaide as well as Sydney and Melbourne.

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17 Comments

  • Ali Adam

    says:

    Rex are a pack of Wingers!! They got more support from the government because of the favoritism shown by the Morrison government due to the fact that the CEO of Rex was once part of the government.

    Stop being such a whiner and get on on with the job OR SHUT DOWN YOUR AIRLNE!!

  • Craigy

    says:

    $99 fares one way all day everyday is not sustainable without cross subsidisation from other routes. The Saab carries 34 passengers. That means that if and I stress if, the plane is full, that equates to revenue of $3,366 for the flight if everyone paid $99. Out of that must come the costs of: fuel, landing charges, salaries (not only aircrew and flight attendant, but also engineering, baggage etc) facility charges at Sydney and Canberra, maintenance on the aircraft (parts, repairs to seats etc) and apportioning revenue towards heavy maintenance.

    These fares will not last long as the red ink starts to flow.

  • William (Bill) Meeke

    says:

    Classic REX approach. No matter what the problem, it is always someone else’s fault!

  • Let’s face it, QF would much prefer that they were the ONLY carrier. Period.

  • Rick Noack

    says:

    Oh REX, you have been price gouging on the Broken Hill to Adelaide route. Once affordable and many special seats, now you are lucky to get one or two special seats. It’s about time you are held accountable and become competitive for the regional centres. You only dropped the prices when you had competition with Southern Airlines. When they left, up went your one way fares. Shame on you. Time for Qantaslink to tap into that flight sector too.

  • Ben

    says:

    I was on the first departure from CBR at 8.30am. Haven’t been on a Saab 340B in many years. Service was great, it left on time and got me there safely but it was very noisy, cramped and there was a great deal of vibration. I was sitting right next to the prop so maybe that was it. Also, there’s no overhead bins on the left side of the aircraft so i had to jam my bag under my feet – all in all I’m glad it was only a 30 minute flight 🙂 Would I take it again? If it’s half or a third the price of Qantas – definitely. A bit of discomfort is worth it.

  • James

    says:

    I’m quite sure Rex isn’t going to Canberra “for the first time.” They operated into there as far back as 2002.

    • J_sh

      says:

      I flew REX between Canberra and Sydney quite a few times fifteen years ago.

  • Ashley

    says:

    Sharp’s not winning any customers’ with his constant sniping against QANTAS.
    He does it because he’s jealous of QF’s market share, & he’s probably not doing too well on the SYDMELSYD flights’.
    He still hasn’t had the guts to say why Rex isn’t flying to BNE. So much for his ‘golden triangle’ routes’.

    About time he gave it a rest, as it’s a well worn record.

  • DM

    says:

    Not changing the lead in fare is one thing, but its more about the actual fare most people pay. Hardly ever do you nab a lead-in fare price on domestic routes.

  • Ian Becker

    says:

    What Canberra needs is late Friday and weekend services to encourage visitors on weekends. Rex isn’t exactly pushing that barrow..

  • LuckyEddie

    says:

    Was looking forward to Rex flying out of Brisbane, why haven’t they started? Too expensive isn’t the answer.

    • Warwick

      says:

      Sharp hasn’t said why he’s not flying to/fro BNE, because it’ll leave him embarrassed, & make him look like an a%#.

      ‘He doth protest too much’ against QANTAS, which means he can’t match them in any way.
      He’s finding out that the so-called ‘golden triangle’ isn’t raking in the big $ he thought it would.
      Rex will be cancelling routes’ by end of this year, especially when Fed Govt ‘largesse’ ends on 31-10-2021.

  • David

    says:

    Unlike of course Rex’s market gouging on the Dubbo Briken Hill route where, thanks to its monopoly, Rex commonly charges in excess of $600 one way!

  • Deb T

    says:

    Qantas is synonymous with gouging. Try flying in or out of Mt Isa, Qld from Melbourne. The average one-way fare is $600. One way. Qantas is the only carrier doing the trip, connecting flights through to Brisbane via Jetstar. Because mining giant Glencore (which doesn’t pay tax, by the way) happily subsidises the airline to transport it’s FIFO workers, Qantas is able to charge ridiculous fares. Not everyone going to or from Mt Isa is on a 6-figure salary. Gouging at its best, and allowed to run unchecked.

    • Denny

      says:

      If an air fare is too expensive, you have alternative means of transport in a hire car, train or bus.

    • Kenneth

      says:

      By your comment, you’re not trained in the construction of domestic airfares’, therefore you don’t realise.
      Every time an aircraft lands at an airport, fees are charged.
      At every city an aircraft pulls up to a terminal, fees are charged.
      Then there’re salaries’ to be paid to ALL staff involved, both onboard, & on the ground.
      Fuel is costly, as well.
      So, $600 one-way ISAMEL via other cities’, is just about right.

      QANTAS is not ‘gouging’, considering all the costs it has to outlay for that flight.

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