Rex has promised that it will launch more services on Qantas exclusive routes as the bitter row between the airlines over network expansion continues.
The regional carrier made the announcement alongside revealing its demand is back to 60 per cent of pre-COVID levels and suggesting the business expects to break even during FY2021.
Rex’s promise to take on Qantas marks another escalation in the war of words between the two airlines, which have for months been launching services to destinations previously exclusive to each other.
In a market update released on Monday, Rex said it had embarked on an “aggressive expansion on new regional routes”, including services “monopolised” by Qantas such as Coffs Harbour and Port Macquarie.
“Combined, the two centres had about 40 per cent of the number of passengers in Rex’s entire regional network,” it said. “Rex will also soon be announcing entry into other Qantas monopoly ports.”
The airline revealed that demand is varied across Australia, with Queensland back to pre-COVID levels and WA also performing strongly.
“Rex is cautiously expanding its regional network in an effort to stimulate demand,” the business said. “We are keeping our capacity growth about 5 per cent ahead of demand growth. Rex’s regional capacity is therefore 35 per cent of what it was pre-COVID.”
Finally, Rex said that while its regional operations were currently “slightly loss-making”, it will return to profitability soon, and said there was “very strong advanced bookings” for its new domestic routes, which include Sydney, Melbourne and Canberra.
“Rex is one of the rare airlines in the world able to achieve this incredible outcome during the pandemic while at the same time funding the expansion of the business into the domestic airline market.”
The news comes days after Qantas said it would launch seven weekly return flights between Burnie and Melbourne, which is currently 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.
“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.
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.
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