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Rex calls Virgin ‘weak competitor’ as it flies Melbourne–Canberra

written by Adam Thorn | May 18, 2021
One of Rex’s 737s, VH-RYU, as shot by Victor Pody

Rex has branded Virgin “a weak competitor” and accused Qantas of ripping off customers as it announced it would rival the pair to fly Melbourne–Canberra.

The airline said it would offer one-way fares from $69 when it launches from 10 June – a price significantly lower than the current average of more than twice that.

Rex’s new route marks yet another escalation in the war of words between the three national airlines, which have for months been launching services to destinations previously exclusive to each other.

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In the last few weeks alone, Qantas chief executive Alan Joyce mocked Rex’s “empty aircraft” while Rex deputy chairman John Sharp said his rival is “technically insolvent”.

On Tuesday morning, Rex announced it would operate a twice-daily return service using its 737s between the two capitals, bringing 200,000 annual seats to the route.

It follows last month’s launch of the Sydney-Canberra service where Rex now operates seven return flights each weekday.

Rex estimates more than a million people travelled between Melbourne and Canberra each year pre-COVID and argued that return flights on Qantas can cost “more than $900”.

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“Indeed, a return Qantas flight this Queen’s Birthday long weekend costs as much as $928.28,” it claimed.

Sharp then reiterated his long-standing argument that Qantas is “price gouging”, adding it was “ripping off passengers with sky-high fares” on a route with “only a weak competitor to keep it honest”.

“This will now change with Rex’s entry,” said Sharp. “We are sure that both Qantas and Virgin Australia will immediately match our fares as they have done every time.

“We estimate that Rex’s entry will save Canberrans over $150 million a year in lower fares once travel returns to pre-COVID levels. This is on top of an equivalent amount for the Sydney-Canberra route.

“The savings will make a big difference to many families during this trying period and will be funnelled into the local economy and create more jobs.

“The cheap fares will add a further boost to the tourism and hospitality industries in the ACT and make it really affordable for Canberrans to visit friends and family and attend sporting events in Melbourne.”

Qantas disputed Rex’s claims, telling Australian Aviation, “Rex has once again shown they’re unable to use a calculator with Qantas return fares for the June long weekend available from less than half of the price they’ve quoted. Unlike Rex, we welcome competition on the routes we fly.”

ACT Chief Minister Andrew Barr said the new route would be a “major boost to competition”.

“It will make it easier, and significantly cheaper, for people to visit Canberra,” hesaid. “It is a further vote of confidence in Canberra’s tourism and hospitality industry and today’s announcement will be welcomed by both leisure and business travellers.”

The news comes a week after Rex promised it would launch more services on Qantas exclusive routes as the bitter row between the airlines over network expansion continues.

That announcement itself came only days after Qantas said it would begin seven weekly return flights between Burnie and Melbourne, a Rex exclusive route.

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: Sydney—Orange, Sydney–Merimbula, Sydney–Griffith, Melbourne–Merimbula, Melbourne–Albury, Melbourne–Wagga Wagga, Melbourne–Mount Gambier, Adelaide–Mount Gambier.

Outlining his case at a Senate committee at the time, Sharp said the routes Qantas moved into 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 in turn hurts us in our expansion into the domestic market,” he said.

Despite the argument, the flag carrier ploughed on, 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 capital city expansion has included flights to CanberraGold Coast and Adelaide, as well as Sydney and Melbourne.

Finally, two weeks ago, Joyce and Sharp exchanged withering newspaper columns about each other in the AFR.

“It’s a well-known fact in the industry that Rex has now chalked up another dubious honour,” wrote Joyce. “It has presided over the worst launch of a new jet airline in Australia’s aviation history, with empty aircraft and announced routes that have never been flown.”

It came after Sharp wrote that Joyce was a hypocrite for going “cap in hand” to the federal government for help.

“Qantas is now so desperate that it is willing to risk universal ridicule just to get its hands on more cash at any cost,” he wrote.

11 Comments

  • Damian

    says:

    Sharp’s sure spreading his very old, only 6, Boeing 737’s around thinly.
    Bet he keeps his fingers’ crossed constantly, hoping none go U/S at any time.
    If he’s hoping for big loads of pollies’ on his CBR flights’, they’ll be on QANTAS getting their FF points, something which Rex hasn’t got…..yet.
    Sharp can mouth off all he likes now, but wait until 31-10-2021 when the FedGovt ‘cash cow’ stops, & then see how ‘loud’ he’ll be.
    The silence will be deafening.

  • AgentGerko

    says:

    Rex was always going to compete on the Golden Triangle of MEL-SYD-BNE yet now they seem intent on doing anything but. Rex should stop looking at Canberra, where the majority are travelling on govt business so have no desire to look at price so long as they get their FF points. I just did a random look at SYD-CBR on my GDS and Rex’s 34 seat Saabs are pretty much empty whilst QF’s 100 seat 717’s are pretty much full.

  • Scott

    says:

    Excellent news. I used to travel between Melbourne and Canberra almost weekly with QANTAS. There were times where I could have travelled to Los Angels from Melbourne, return, for cheaper. I am not joking. That included having to travel on a Turbo-Prop.

    If you want an example, check the dates around Senate estimates. QANTAS could almost fill the flights with people travelling for that, and being Government, they didn’t care about the price.

    QANTAS has price gouged like a ****** on that route for at least a decade.

  • Jim

    says:

    Rex are bullies, they say and do anything to try and get what they want. Even their own employees know it. I’d rather fly with QF and pay extra than have my money sent to Singapore.

  • Kade

    says:

    Meanwhile Albany-Perth still $200+ one way

  • Boderick

    says:

    “The CEO doth protest too much, methinks”

    • Terrence

      says:

      Rex’s CEO lives in Singapore.
      Sharp’s his motor-mouthed deputy CEO.
      Bad choice, as he’s an ex NP pollie, who doesn’t know when to be quiet.

  • Ben

    says:

    How many $69 fares though… I’ll bet it’s only one or two and the rest are $200+! Also easy to say QF are expensive when you headline the price of a fully flexible J fare. The vast majority of the population have little idea of the price of J let alone flex J!

  • Craigy

    says:

    The old saying goes, empty vessels make the most sound. With all the noise coming from Sharp, he demonstrates that the old saying is still relevant today.

    • Warwick

      says:

      ….and then some, Craigy!

      Sharp has not got anywhere by having constant, cheap shots’ at QANTAS, now he’s starting to do the same to Virgin.
      All that means is both carriers’ are making inroads into Rex’s income, & he doesn’t like it.
      His airline’s not getting good load factors’ on quite a few routes, & near empty planes’ don’t pay the bills.

      He still hasn’t said where he’s getting the next 4 jets’ he wants to have in service, by July, & December, this year, or how he’s going to pay for them, as he’s already used up the $170mn he got from Rex’s Singaporean owners’ several months’ ago, leasing the current 6 he’s flying around.

      He still hasn’t said WHY he’s not flying to/fro BNE.

      So there’s lots of pertinent information he’s NOT saying, just constantly suffering verbal diarrhoea over nothing of substance.

  • br

    says:

    Some comments here mention government employees favouring Qantas due to FF points – government booked flights do not attract FF points for employees. Status another matter.

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