Opinion: Is Rex’s heart still in the country?

“We’re a regional airline, that’s what we do. We’re a feeder organisation for the bigger airlines. I understand Rex’s concern about it, but everyone has that same concern,” he said, adding that keeping a pilot for three or four years is “a great outcome”.

“There will be a percentage of our pilots that are here to build their hours to move into the majors, be it into QantasLink on the Q400s, Alliance Airlines on the Fokkers or the Embraers, or even direct entry into Qantas or Virgin. That’s a normal career progression, and I think most airlines would understand that.”

But is Rex still a “regional carrier”? While airlines like Skytrans, FlyPelican, Link Airways and new entrant Nexus Airlines can undoubtedly be considered regional carriers, if you ask the same question about Rex, the waters are somewhat muddier of late.

The airline – which was born from the ashes of Ansett’s regional arms, Hazelton Airlines and Kendell Airlines – certainly serves mostly regional routes, with the overwhelming majority of its destinations being outside the capitals.

Its expansion into domestic jet flights using a fleet of soon to be 10 leased 737-800s, however, has added a new revenue stream as it goes up against the big boys Qantas, Jetstar and Virgin on capital city routes, particularly on the lucrative Sydney–Melbourne–Brisbane “Golden Triangle” – and that’s leaving aside its move into FIFO with its acquisition of National Jet Express (formerly Cobham).

At the same time, parts and labour shortages have forced Rex to pull its Saabs back from a lot of regional routes, reducing frequency on some and outright axing or suspending others, much to the dismay of locals who had come to rely on them (see: Cairns–Bamaga).

The recent launch of its Rex Flyer loyalty program, up against Qantas Frequent Flyer and Virgin’s Velocity, is also turning heads and adding to the appearance of a change in tack – how many regional airlines have their own frequent-flyer arms, after all?

 Compare to the pair

Speaking of the major players, let’s not forget, either, that Qantas and Virgin have their own regional arms – Qantas has QantasLink, a long-time thorn in Rex’s side with its large fleet of Dash 8s, 717s (soon to be replaced by A220s), Fokkers, wet-leased E-Jets, and A319s and A320s, operated by various subsidiary companies under the brand.

It’s QantasLink that Rex competes with most viciously, highlighted in recent months by the Flying Kangaroo’s decision to step up services to Whyalla in SA after Rex pulled out of the city due to a spat with the local council.

Virgin, meanwhile, has its Virgin Australia Regional Airlines (formerly Skywest), which primarily operates in WA with a small fleet of Fokkers and A320-200s (the latter aircraft inherited from the now-defunct Tigerair). Both of these airlines are clearly smaller offshoots of major carriers.

And then, of course, we have the wildcard that is Bonza, which has been staking its claim to a slew of regional and holiday destinations with point-to-point services crisscrossing the country, not on turboprops or smaller jets like Fokkers and Embraers, but on big, chunky 737 MAX 8s. Is Bonza a “regional airline?” Given it only flies to one capital, namely Melbourne, one might assume so, but the MAX 8 is not a plane you expect to see a regional carrier fly.

So, where does that leave Rex? Could the third most prevalent tail in Australia’s airspace evolve to become, like Qantas and Virgin, a domestic carrier with a regional arm – or will it be a regional carrier with a domestic arm? Can such a thing exist, and where does one draw the line between domestic and regional, truly?

Looking at the broader picture, whatever Rex is now or decides to be in the future, its push into capital city flights has certainly been an important wake-up call for the Qantas–Virgin duopoly. More competition in Australian domestic aviation can only be a good thing, as capacity drives down airfares and offers more opportunities for Australia to stay connected.

If Rex can pull this off, it has the potential to become a true third force in Australian skies and break the stranglehold Qantas and Virgin have held virtually unchallenged for well over a decade.

It just needs to make sure it doesn’t lose sight of where its heart is in the process.