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Rex beckons rivals to match its $39 Sydney–Melbourne sale

written by Adam Thorn | May 3, 2021
Rex's latest 737, YH-RYU, arrives at Melbourne YMML (Victor Pody)
Rex’s latest 737, YH-RYU, arrives at Melbourne YMML (Victor Pody)

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.

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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.”

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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.

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9 Comments

  • John Phillips

    says:

    Of course these fares will be matched, possibly even bettered.

    And the REX will go squealing to the Government again?

    Looks like another Compass/Ansett like disaster looming here.

  • Ben

    says:

    Au contraire Mr Sharp, I believe this initiative will single handledly commence the end of Rex’s jet services. The race to the bottom doesn’t end well for the small player! When DANS and RANS end and the cash cow dies, Rex is going to find itself well up excrement creek without a means of propulsion! Sale fares like this at the very least intimates that Rex is desparate for bums on seats. “Anyone? Anyone?”

    • Tony

      says:

      That is a ridiculously flawed argument. For one, Compass had zero shareholder and zero international conglomerate investment, and started Day 1 of revenue paying flights as a new airline. Regional Express is an ASX-listed company with steady growth and increasing its market share faster than even Virgin Blue of 2001 when that former airline commenced. REX has international investors that can (and have) offset any losses the airline makes by spreading the loss evenly across other business interests. Additionally, REX has been around for 20-ish years and knows the market very well. Rex does not have to rely on the RASS program anymore since adding jets to its fleet, as regional flights are no longer its core business focus or even in its growth plans. (In saying that, I predict that any dropped regional routes will be picked up by FlyPelican or Link). And as to your suggestion that ‘Rex is going to run to the Government again,’ well to be fair, every airline in Australia has, and when Qantas gets preferential treatment by the Federal Government, Rex is entitled, as is any other business in every sector, to approach the Government for assistance. REX is a great Aussie success story that needs our support especially during Covid-19.

  • Craigy

    says:

    The $39 headline airfare is all about generating headlines and nothing else. The big question is how many seats are available at this airfare per flight? REx may say their heart is in the country but the reality is the country isn’t Australia, it’s Singapore.

  • matt

    says:

    $39 is probably less cost than sending a 23kg bag via road freight

  • Chris

    says:

    That won’t be sustainable. Rex has realised that their loads are so poor they need to do something to get some support.

  • marcus

    says:

    Wow

  • Stu Bee

    says:

    I made this comment on another article…

    This is current airfare war is the Australian aviation industries version of the movie “Highlander”

    There can be only one…. (and Qantas)

  • Neil

    says:

    looks like the return of Oz jet,& Compass!!

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