Rex has confirmed the withdrawal of services from five regional centres – blaming Qantas and drawing a strong and categorical denial from its larger rival.
Qantas declared that Rex’s “standard approach” when withdrawing from a route, “is to blame others, usually Qantas”.
More of the Qantas response later in this story.
Rex earlier this month announced the termination of services between Sydney and Canberra and between Albury and Melbourne.
The latest Rex destinations to get the chop are:
- Bathurst
- Grafton
- Lismore
- Kangaroo Island
- Ballina
Flights to these five centres will cease on 30 June 2022, coinciding with the end of the Federal Government’s Regional Airline Network Support (RANS) program – except for the Ballina route, which will terminate on July 2.
Rex deputy chairman, John Sharp said Rex had “faithfully serviced most of these routes for 20 years and some of them for more than 30 years by Rex’s predecessor Kendell and Hazelton. So it is with a really heavy heart that we have to announce the cessation of services in an effort to improve Rex’s financial performance.”
Two other Rex NSW regional routes are pending further review.
Sharp said “well-publicised predatory actions on Rex’s regional routes” by Qantas had meant “that Rex no longer has the ability to cross-subsidise these marginal routes”.
Rex ended services between Sydney and Canberra on Monday this week. It launched Sydney-Canberra services in April last year, as part of an expansion of its regional and domestic network.
Airfares dived, but Sharp said “the entrance of an additional operator and the very high charges imposed by Sydney Airport from 1 June 2022” meant the route was no longer viable for Rex.
“The resources will be diverted to other routes which will provide a better return,” he added.
The last Rex Sydney-Canberra flight flew last Sunday (29 May 2022), which also marked the end of the airline’s services between Albury and Melbourne. Passengers affected will be offered to reroute free of charge or a refund.
“Pre-Covid, 22,000 passengers a year flew between Albury and Melbourne, hardly enough passengers for one carrier let alone two,” Sharp said.
“Qantas then entered the route – one of nine Rex regional routes targeted by Qantas during the Covid pandemic – dumping an additional 31,000 seats annually into the market.
“It is with a heavy heart that we have to exit this route, after servicing it faithfully for the last 39 years. Rex has no choice but to look after itself.”
Qantas lost no time in issuing a categorical denial of the Rex accusations, which Qantas described as “false claims”.
FROM THE QANTAS STATEMENT ON THE MATTER
“On 30 May 2022, when it [Rex] announced it was withdrawing services from Bathurst, Grafton, Lismore, Kangaroo Island and Ballina, Rex blamed Qantas, despite the fact that Qantas operates on only two of these routes (Kangaroo Island and Ballina) and Rex is the sole operator on the other three routes.
“This is just the latest example of Rex blaming Qantas and others for decisions that by its own admission it has made ‘to look after itself’.
“In May 2022:
- Rex blamed Qantas when withdrawing from Melbourne-Albury, despite Rex operating 40% more seats on the route
- Rex blamed Sydney Airport and Virgin Australia when pulling out of Sydney-Canberra.”
Qantas says that in some cases, Rex had blamed Qantas “when the national carrier doesn’t even fly on those routes”.
Qantas said: “In May this year, Rex said Qantas was making its Sydney to Cooma flights unviable because we had added 15,000 seats on the route, despite the fact we do not operate on the route.”
Qantas then addressed assertions by Rex that Qantas launching regional routes was bad for local communities because it drove out the competition.
Qantas stated: “On 31 March 2022, the ACCC advised Qantas that it was taking no further action in respect of its investigation of Rex’s allegations that Qantas had acted anti-competitively.
“The reality is that Qantas services have been welcomed by regional communities as providing competition and flexibility.
“Since Qantas started flying Sydney-Broken Hill and Sydney-Orange, both Qantas and Rex have increased flights to meet growing demand.
“In fact, when Qantas launched services to Broken Hill, Broken Hill Regional Council Mayor Tom Kennedy said, “I think the community will be very excited to see the arrival of Qantas and to see some competition in the local market.”
Qantas denied any suggestion that launching new regional routes was aggressive predatory behaviour designed to hurt Rex.
For the full Qantas statement, see here.
Qantas is Australia’s biggest airline by far, with extensive regional, interstate and international services.
Rex claims the title of Australia’s largest independent regional and domestic airline. Rex operates a fleet of 60 Saab 340 and 6 Boeing 737-800 NG aircraft to 62 destinations throughout all states in Australia. In addition to the airline Rex, the Rex Group includes wholly-owned subsidiaries Pel-Air Aviation (air freight, aeromedical and charter operator) and two pilot academies, Australian Airline Pilot Academy in Wagga Wagga and Ballarat.
Written by Peter Needham
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