ASIC sues Rex for allegedly misleading the market on company's profitability

[MEL_Traveller]

In terms of ‘business compatible’ they offered two things… very competitively priced airfares, even last minute you could get a ‘full fare’ business class ticket for $349 and secondly, they were largely on time.

While ZL didn’t offer a 7pm MEL-SYD - my preferred time - it’s ironic that it often left pretty close to the VA 1900:departure.

So I could either spend 90 mins at the airport waiting for VA, or spend less than 30 in the terminal for ZL.

Yeah FFP was a big fail… but would have reduced those $349 fares even further… to around the $280-300 level if using points as soon as accrued.

 

[ChrisFlyer]

In terms of ‘business compatible’ they offered two things… very competitively priced airfares, even last minute you could get a ‘full fare’ business class ticket for $349 and secondly, they were largely on time.

While ZL didn’t offer a 7pm MEL-SYD - my preferred time - it’s ironic that it often left pretty close to the VA 1900:departure.

So I could either spend 90 mins at the airport waiting for VA, or spend less than 30 in the terminal for ZL.

Yeah FFP was a big fail… but would have reduced those $349 fares even further… to around the $280-300 level if using points as soon as accrued.

Their airfares may have been cheap, but they also weren't in much of a position to negotiate corporate airfare agreements (the kinds that require the company's travellers to book with that airline as the preferred carrier even at times when competitors are more expensive), which is where a good chunk of yield comes from. They didn't offer any kind of status match, so all those regularly flying for work would be very motivated to remain loyal to their previous airline (e.g. QF/VA) rather than willing to start again with a much smaller carrier with no benefits. They didn't have any lounge offering at Australia's third busiest airport (BNE) - despite taking over the lease of the old VA cafe lounge but never bothering to open up the space. Plus, it's easier to be on-time when you don't have many flights to run. If you're only offering 2-3 flights per day, it's a lot easier to claim to be 'on time' than other airlines that have the passenger volumes to fill flights every 15-30 mins at times with corporate travellers, where even a 30 min delay means you could just jump on a different flight if seats are available.

For very cost-conscious personal travellers and some smaller scale SMEs, Rex's cheap fares were great. Heck, I flew them a handful of times when the other airlines were far more expensive and I needed to travel at short notice. But, they didn't have the 'stickiness' as a carrier (or in their frequent flyer offering) to make them my first choice / preferred airline. I suspect the same would be true of many others. They were great to have around, but hard to justify supporting as a frequent traveller.