Rex announced on Monday it would sell tickets between Sydney and Melbourne for $39 – and then predicted its rivals would rush to copy its deal.
“I believe this initiative will singlehandedly revive a moribund travel and hospitality industry in the two cities,” Rex’s deputy chairman John Sharp said. “The resulting copycat moves from our competitors will mean that there will be hundreds of thousands of $39 fares available.”
It marks the most aggressive move yet in the sales wars between airlines rebuilding their networks, which previously saw Virgin rush to match Rex’s $49 offer in hours.
Sharp though hailed Rex’s new deal as offering tickets cheaper than taking the bus, adding it was the lowest-ever fare between the cities from a non-budget carrier.
“Stakeholders in Melbourne and Sydney have provided extraordinary support to Rex when we launched our services and we hope that our initiative will be able to return the favour,” he said.
“Since our entry into the domestic market, the cosy duopoly has been completely disrupted and the Bureau of Infrastructure and Transport Research Economics (BITRE) has noted a significant reduction in average airfares in all the domestic routes that Rex covers.
“This is why Rex is good for Australia and why Australia needs Rex. For the first time ever Australians can have premium reliable domestic air services at honest prices delivered with our trademark country hospitality.”
Sharp also accused its rivals of “disingenuous delaying tactics” in providing COVID refunds and said other airlines “simply do not have the cash” to put money back in customers’ bank accounts.
The move by Rex is likely to trigger a response by mid-market rival Virgin Australia.
On 10 February, Virgin matched Rex’s $49 Sydney–Melbourne offer within hours. Rex’s launch price for the route was $79 in December.
The so-called ‘golden triangle’ between the NSW, Victoria and Queensland capitals is known as one of the most lucrative domestic routes in the world.
Last month, Australian Aviation reported how Rex took delivery of a sixth 737 allow it to continue to expand its new capital city network, which now flights between Canberra and Sydney, the Gold Coast and Adelaide as well as Sydney and Melbourne.
Rex also confirmed it was still planning to take delivery of two more aircraft in July and could grow its fleet beyond eight by the end of 2021.
The business signed off on a $150 million investment in November last year to allow it to expand its operations to fly major domestic routes.