Rex is primed to take on Qantas head-on, after the Flying Kangaroo announced it will soon begin operating two weekly return flights between Sydney and Broken Hill – a route that Rex has operated solely for 18 years.
Rex Airlines has held a monopoly on Sydney-Broken Hill flights since 2004, and currently conducts daily return flights plus one return service on weekends on its 36-seat Saab 340 aircraft.
However, come Friday, 8 April, QantasLink will break Rex’s exclusive streak on the route, with twice weekly return flights, taking place on Mondays and Fridays, on its fleet of 50-seat Dash 8 Q300 aircraft.
Speaking with ABC Radio on Tuesday morning, Rex deputy chairman John Sharp accused Qantas of unnecessarily “swamping” the market, however Rex is ready to adjust its operations as needed to compete.
“We are constantly looking at the schedule and trying to adjust to suit the market conditions and we will obviously keep doing that.
“I mean [Qantas’ entrance] will impact on what we do in some form or another; We’ll probably shift schedules around a little bit to try and be even more competitive with Qantas and try and match whatever they’re doing and do it better and cheaper for the passengers.”
Sharp suggested that Qantas was only moving into the Broken Hill route in order to “retaliate” at Rex’s decision in late 2020 to expand into the domestic capital city market, placing it in competition with Qantas.
“They don’t like that, and they’ve made lots of complaints to people about our behaviour in moving into that market. So, in retaliation, they’ve been moving into our regional market,” Sharp said.
Sharp said that pre-COVID, around 28,000 passengers flew between Sydney and Broken Hill each year, a number which has fallen to under 9,000 since the beginning of the pandemic.
“Qantas’ announcement yesterday means that they’re putting 10,000 seats into the market, where there’s currently only 8,000 or 9,000 passengers,” Sharp explained.
“They are swamping the market and the question is whether they’ll hang in there and keep offering the service, or whether after a short period of time, when they’re satisfied that they’ve given Rex a good punch in the nose, then they’ll walk away from it.”
Sharp also noted that Rex and Qantas will “now both lose money on the Broken Hill service”, given the fact that there will be far more seats available than demand dictates.
“You’ve got to think that we’ve been doing this by ourselves to Broken Hill for 18 years, since Horizon stopped flying, and Qantas has had all those years to come and fly and operate into Broken Hill, but they’ve chosen not to,” he said.
“Because they know they’ll never make money out of it with two operators.”
Meanwhile, announcing the decision to expand into Sydney-Broken Hill, QantasLink CEO John Gissing said the service will offer greater connection between urban and rural NSW.
“We are constantly looking for new opportunities to stimulate domestic tourism and support small business operators across regional Australia,” he said.
“We know many Australians are eager for their next holiday destination and outback New South Wales has plenty to offer.”
Broken Hill regional council mayor Tom Kennedy welcomed the announcement and said Qantas’ arrival on the route will result in greater choice and lower airfares for customers.
“I think the community will be very excited to see the arrival of Qantas and to see some competition in the local market,” he said.
“Air travel is of vital importance to our community for tourism, health, and education, and I’d like to thank Qantas for providing locals with more options and more flexibility by offering their services out of Broken Hill.”
Rex currently has its Sydney-Broken Hill flights routed via Dubbo due to current demand trends, however, intends to restart direct daily flights from the end of March.
Rex has long accused Qantas of inserting itself into Rex’s previously-exclusive routes in retaliation of Rex’s similar expansion into the domestic market, and last year announced it has appointed a legal firm to “pursue all legal remedies” against Qantas over the issue.
The airline said the team will be led by Clayton Utz’s Fred Prickett, who has previously represented gambling business Tatts in its “nine-figure dispute” with the state of Victoria.
The move follows a long-running war of words between Rex and Qantas over network expansion, which has seen Qantas’ chief executive, Alan Joyce, mock Rex’s “empty aircraft” and Rex deputy chairman John Sharp argue that he doesn’t know how Joyce can “look at himself in the mirror some mornings”.
Qantas has consistently denied any wrongdoing.