With rex launching its first Sydney-Melbourne-Sydney services this week, the domestic air fare war is really heating up, with QANTAS and its low cost operation Jetstar – which is about the only bit of QANTAS that has made series money over the last few years – Virgin Australia, Alliance Airlines and of course rex all on a head on collision course and slashing their prices in a prime route fare war.
While that is great for consumers right now, the losers in the long term will also be consumers and the airlines, with an aviation analyst telling me last week that QANTAS will do everything in its power to kill off Virgin Australia and he gave Virgin Australia no more than 2 years before Bain closed it down.
This would leave domestic aviation in the hands of QANTAS and Jetstar, rex and Alliance Airlines, with the consensus being that rex will retrench back to its regional routes and Alliance which is already 20% owned by QANTAS will be fully acquired by QANTAS, leaving the flying kangaroo and Jetstar to hold the magical key to the domestic aviation market and able to charge what they like.
In any case, while I could not attend rex’ launch, a report in the Age was sent to me by a colleague, which I think we all will find interesting, in that former Virgin Australia CEO, Paul Scurrah who was sidelined rather nastily out of Virgin Australia was on the rex’ guest list!
Now, that may be no more than coincidence and I don’t know if he actually attended, while the report says rex representatives would not comment,… as we all know, no smoke without fire – so shall we wait for the announcement?
A report by John Alwyn-Jones
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