Australian regional carrier Rex said Monday (22 February) that it was undergoing a “major revamp of its regional route network in response to aggressive predatory moves by Qantas into thin regional routes serviced by Rex”.
Rex’s deputy chairman, John Sharp, said in a statement that “Qantas has clearly embarked on a deliberate strategy of moving into Rex’s routes that can only support one regional carrier in an attempt to intimidate and damage Rex in its traditional regional market, hoping that Rex would be a less formidable competitor in the domestic market. Qantas is making record losses during COVID and has received an estimated A$1.2 billion in Commonwealth assistance to stay solvent but, despite this, feels it is appropriate to use taxpayers’ funds to finance the losses on new services whose sole objective is to weaken the competitor.”
Rex said new routes announced by Qantas “have only supported one regional carrier in the past and the current monthly passenger numbers are laughable. Even when passenger numbers return to pre-COVID levels, these routes would still be unable to viably support two. The Rex Board has decided to stand its ground in these routes even if inevitably both carriers will be making significant losses. Unfortunately, the expected drag on Rex’s financial position from the losses on the above eight routes will mean that Rex will be unable to continue subsidising marginal routes that we have serviced for the past 20 years.”
Rex said that it would cut five routes with “a heavy heart” once government support is discontinued at the end of March.. The routes include:
- Sydney – Bathurst (20,000 passengers pre-COVID)
- Sydney – Cooma (6,000 passengers pre-COVID)
- Sydney – Lismore (12,000 passengers pre-COVID)
- Sydney – Grafton (18,000 passengers pre-COVID)
- Adelaide – Kangaroo Island (42,000 passengers pre-COVID including Qantas)
“In order to recover from the losses, Rex will, from April, commence new services to ports where Virgin Australia has retreated, leaving Qantas as the sole or dominant operator,” Rex said. The new services are from Sydney to Coffs Harbour (330,000 passengers pre-COVID) and Port Macquarie (190,000 passengers pre-COVID). Other routes under active consideration where Qantas is the sole or dominant carrier include:
- Sydney – Tamworth (175,000 passengers pre-COVID)
- Perth – Geraldton (110,000 passengers pre-COVID)
- Melbourne – Devonport (146,000 passengers pre-COVID)
- Sydney – Canberra (930,000 passengers pre-COVID)
Rex also called on the Australian aviation officials to take enforcement actions against Qantas for its “predatory behaviour”, saying “all carriers are facing existential challenges” and the government must “do its part to ensure that the dominant carrier does not take advantage of the current situation to deliver pre-emptive strikes against its much smaller competitors, especially at a time when it is receiving massive handouts to stay solvent. In this environment, the introduction of new competing services in fragile regional routes should be set aside…until we return to a semblance of normality.”