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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 the last few weeks alone, Qantas’ chief executive Alan Joyce has mocked Rex’s “empty aircraft” while Rex deputy chairman John Sharp has said his rival is “technically insolvent”.
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.
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 Canberra, Gold 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.
Bertu
says:It’s so nice to see honest REX take on a slowly but surely crumbling greedy Qantas..As an ex Qantas high end employee myself of many decades I asure you they are getting what they deserve and dished out..I take off my hat and salute to Rex’s bravery and strength to take on this criminal giant.
Bryan
says:So sad you didn’t enjoy your longtime employment with QANTAS.
Why did you stay there if you didn’t like the Company?
Oh, that’s right, it had an excellent Super Scheme, & travel benefits.
AgentGerko
says:Rex needs to find something to fill the gap between its 34 seat Saabs and its 175 seat Boeings. Given, for instance, a flight from Sydney to Coffs Harbour I would take Qantas and its fast 75 seat Dash 8-400’s over bumping my way up on Rex’s slow and bumpy 340B’s and $5-10 fare difference wouldn’t change that. Now if Rex was to pick up some of the many 90 seat Bombardier or Embraer jets sitting around in the worlds deserts then they’d have a real competitor to Qantas as people will always take a jet over a prop given the choice.
Mark Hassett
says:I support REX 100 percent, based on their current services to the rural sector, they should be
welcomed as a challenger to the major airlines
on the major routes like MEL – PER.
Matty
says:It seems to me that REX is following Compass Airlines expansion plans. Hope it works for them because it sure didn’t for Compass. I’m not confident this is a war that REX can win.
Vannus
says:There are no more Boeing 737-800 jets for Rex to lease here.
They’ll have to be sourced from USA or Europe.
That makes for an expensive ‘ferrying’ to Oz.
Expect Rex airfares to increase substantially to supply its’ so-called ‘expansion’.
The maxim ‘too big, too quick’ will be its’ possible downfall, like several other airlines’, in the past here.
Valerie Burns
says:Qantas would have to be the last airline in the world to go where I needed to go. Arrogance of Mr Joyce says it all.
Warwick
says:Really? You’ve met, & spoken with Mr Joyce, to form that negative opinion of him?
Let’s hope you don’t have an ill relative that you need to go to in a hurry, ‘famous last words’ et al.
You are showing your total, astounding ignorance of how a multi-billion $ airline such as QANTAS operates.
Mark
says:I’m gonna ditch the Q400 for a 30 year old SAAB, said nobody ever!
Tony
says:Touché, Mark!
Just gold!
P.p.naik
says:It is often business practice of big mighty to undercut new entrants into market by hook or by crook….and try to drive them away…from competition…and later enjoy monopoly….all over the world this is law of jungle….but Rex with its smart management i hope will be able to withstand this situation and come out successful… whereby travellers will be able to enjoy reasonable fares on routes…good luck.p.p.naik.
Andrew William Quiller
says:Be good if they could do a direct route from ballina to Wagga or Gold coast