Rex accuses Qantas of predatory behaviour, withdraws from routes

[dajop]

It's pretty obvious that Rex carries out it's government affairs strategy very transparently and publicly and does not mince words. Qantas on the other hand, carries out its strategy in corporate speak (publicly), but largely behind closed doors ....

It seems many people prefer the latter, I guess at least we're not exposed to the machinations of what goes on (unlike Rex were every complaint is very public) .

 

[henrus]

Exactly 1 month later... Rex has had a change of their heart (in the country) announcing a restoration of the routes:

Translation...

"We've cried like babies and the government have thrown us more money so we will now continue flying routes that we said just recently weren't worth flying"

 

[Mattg]

Exactly 1 month later... Rex has had a change of their heart (in the country) announcing a restoration of the routes:

https://rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=425959532B324D427551626B4A6455316A6F634B5A43567968635531666A584E336352755559782F4470794A4F4634425A4B6143375857736975626343326C45

What will happen next on 22 April?

So happy that CFS and PQQ will "finally have access to safe and reliable air services"... whatever would they do without Rex?

 

[eastwest101]

So happy that CFS and PQQ will "finally have access to safe and reliable air services"... whatever would they do without Rex?

What were the next 3 words in that sentence from the Rex announcement ?

 

[dajop]

Translation...

"We've cried like babies and the government have thrown us more money so we will now continue flying routes that we said just recently weren't worth flying"

There’s a thread running about people not being able to fly AYQ-ASP. Qantas certainly didn’t cry like a baby and simply aren’t flying the route. Easy. And no criticism of the airline for whining either !

But this leaves alternatives for example, one poster either having to hire an expensive vehicle to travel from AYQ-ASP to get to DRW or convince QF to fly them there via SYD on JQ!

So maybe Rex’s very public approach can be beneficial at times if the alternative is silently abandoning routes.

 

[Jacques Vert]

So happy that CFS and PQQ will "finally have access to safe and reliable air services"... whatever would they do without Rex?

What were the next 3 words in that sentence from the Rex announcement ?

OK, the next 3 words are: "at affordable fares".

So I checked more than a dozen days in late April, early May and February 2022 from CFS to SYD and return. While I am not all that familiar with the Rex website or their fares, I noticed the following:

Every "Promo Fare" on every flight on every day that I checked showed "Sold Out". So there are no Promo Fares at present.

Saver fares are available for $147.95 versus QL whose fares start at $148.07; so a substantial saving of 12 cents. However, note that Rex baggage limit is 15kg unless you have a "Rex domestic connection". The cheapest Virgin fares showing currently are "Elevate" fares, consistently at $229 (and only one flight per day).

Rex do have their "Community" fares available at $118.25, with the same baggage limits. The Rex website states:

"Discounted Community Fares are available on participating routes for early-bird sales up to 30 days prior to departure subject to Community Fare availability*, and for last minute purchases within 24 hours before departure time, all remaining unsold seats are released at the Community Fare level".

However, these Community fares appear to be available on every day currently including 29/3 (5 days from now).

So at this stage it would appear that if you can bag one of the Community Fares and you don't need to take more than 15kg with you, you could save around $30. Otherwise, there's little point in choosing Rex IMHO.

It will be interesting to see how many Community Fares are available once they are up and running, and whether (and how) QL respond.

 

[henrus]

So now Rex is going to launch SYD-CBR on the prop planes. No doubt they'll be launching fares cheaper than Qantas but I don't see Qantas complaining about predatory behavior.

It wouldn't surprise me if in a few day's time REX finds out Qantas already operates SYD-CBR and then starts complaining that Qantas already operates the route.

 

[AIRwin]

Rex has issued a media release welcoming ACCC's increased scrutiny on QF and VA:

https://rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=6B6D42356D3533695A575350715531327546716949353163766B317A664A596E6B79354A79516563354F45322B7837306549454646414F4D764C5041374B4364785938494A64524E4142494853435857704841667942636A304934434F4D654B

 

[Mattg]

Rex has issued a media release welcoming ACCC's increased scrutiny on QF and VA:

https://rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=6B6D42356D3533695A575350715531327546716949353163766B317A664A596E6B79354A79516563354F45322B7837306549454646414F4D764C5041374B4364785938494A64524E4142494853435857704841667942636A304934434F4D654B

Qantas’ load factors on these routes are below 40% and are heavily loss making.

How do they know the flights are heavily loss-making for Qantas? Yields are probably quite good, and Qantas is more than likely carrying valuable freight. I would hazard a guess that many of those flights are actually profitable for Qantas.

 

[jakeseven7]

How do they know the flights are heavily loss-making for Qantas? Yields are probably quite good, and Qantas is more than likely carrying valuable freight. I would hazard a guess that many of those flights are actually profitable.

Qantas also extract a premium more often than not as well as connect to mainline flights that generate additional revenue.

 

[docjames]

Qantas can also “carry” a loss on a particular route (as can anyone) if it drives traffic/revenue/profit onto others.

 

[henrus]

Rex should self-report themselves to the ACCC.... they're the ones who've operated flights with 0% load factors

For anyone interested in the ACCC report that Rex is referring to:

https://www.accc.gov.au/system/files/Airline%20competition%20in%20Australia%20-%20June%202021%20report_1.pdf

A few points I find amusing:
- No clue how Rex is getting load factors of other airlines (counting seat maps? secret spies?).

- When will they stop carrying on about Qantas being "technically insolvent"?

- The continued comments about refund posts on QF's social media are a bit rich given ZL deletes unfavourable posts. Meanwhile, ZL has had many recent complaints about slow refunds or inability to contact to apply for one.

- Complaining about how QF received a lot of gov funding. Rex received over ~$90m in funding. Rex employs ~1,000 people whilst Qantas ~30,000. Making QF 30x larger than ZL in terms of employment. Let's not even get started on ASKs (spoilers QF is a lot more than ZL).

- A odd line "it is unconscionable to be using taxpayer’s money to fund heavily loss-making and anti-competitive actions that harm consumers by damaging and weakening competition."
Um... that is exactly what Rex is doing, the latest ACCC report shows that prices on other routes (not operated by ZL) have risen thanks to Rex's entry, VA has said it's hurting them and it's unclear but possible that some of ZL's gov funding is being spent on 737 services. There is also ZERO chance that ZL is making money on the jet flights right now.

Google says a 737 burns about 750 gallons per hour, a couple of google searches suggests fuel is AU$2.26 per gallon meaning it costs Rex in fuel alone $1695 to fly from MEL-SYD. On these magical $39 tickets rex gets just $9.60 the rest is the taxes, divide $1695 by the fare $9.60 and you end up with 176 meaning they need to basically sell all seats onboard to make money (or sell more expensive fares). That doesn't even consider the aircraft leasing costs, staff, landing fees etc.

 

[dk4]

When will they stop carrying on about Qantas being "technically insolvent"?

Most likely when it isn't!? Seems to me to be a dangerous game the CFO might be playing at QAN right now!

 

[jakeseven7]

Most likely when it isn't!? Seems to me to be a dangerous game the CFO might be playing at QAN right now!

Yea totally, I’m sure the CFO and senior management of QF are risking jail time just to spite Rexy . Whatever.

I’d say Rexy is ‘technically’ insane .

 

[dk4]

Yea totally, I’m sure the CFO and senior management of QF are risking jail time just to spite Rexy . Whatever.

Yeah, woteva... I am sure people said the same thing about management and board risking jail time, with regard to the possibility of money laundering being endemic at Crown!?

 

[Carrots]

This is probably more appropriate in this thread...

I amuse myself, and really, that's all that matters on a dreary wet Friday afternoon!

The cheapest ZL single fare from Melbourne to the national capital is $69 compared to $39 to SYD, so at least ZL makes a little coin to cover some costs on the Canberra route.

Somebody better call the ACCC... seems like Rex is price gouging on the MEL - CBR route

 

[jakeseven7]

Yeah, woteva... I am sure people said the same thing about management and board risking jail time, with regard to the possibility of money laundering being endemic at Crown!?

Cool story bro

 

[PLM]

Why are the Rex management such crybabies?

 

[AIRwin]

Meanwhile, ZL has had many recent complaints about slow refunds or inability to contact to apply for one.

Rex has created a dedicated online automated portal for COVID refund requests that will ensure eligible tickets are refunded to the passenger’s bank within 7 days of request:

https://www.rex.com.au/BlobViewer/BlobViewer.aspx?attachtype=MR&filename=586532654274344B64517849416F6F5066376A5550633238796C797773324A4A64694431472F36756C61686B51556C566562626F59715349684677676B463668566B6A6C7A374163706552427065484C4A72744733513D3D

 

[AIRwin]

After announcing that they were considering legal action against QF for predatory actions, Rex has moved to appoint litigation law firm Clayton Utz to pursue all legal remedies...