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”.
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.
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.
“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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