Rex Withdraws from 7 Regional Routes

Matt Graham
Rex Saab 340 planes at Albury Airport
Rex Saab 340 planes at Albury Airport. Photo: Matt Graham.

Rex will end all services on the Sydney-Canberra route this weekend, just over a year after entering the route.

The announcement comes days after the regional airline revealed it will cease serving the Melbourne-Albury route at the end of May. Rex is also withdrawing from five other regional routes including Sydney-Bathurst and Adelaide-Kingscote at the end of next month.

Rex cancels Sydney-Canberra flights

Passengers who were booked on a Rex flight between Sydney and Canberra for travel after 29 May 2022 will be offered a refund or an alternative flight via Melbourne. Rex currently flies once daily between Canberra and Melbourne, and four times per day between Melbourne and Sydney using Boeing 737s.

Announcing the withdrawal of Sydney-Canberra services yesterday, Rex Deputy Chairman John Sharp cited the resumption of Virgin Australia services on the route.

“Unfortunately with the entrance of an additional operator and the very high charges imposed by Sydney Airport from 1 June 2022 mean that the route is no longer viable for Rex. The resources will be diverted to other routes which will provide a better return,” Sharp said.

Virgin Australia returned to this route in March 2022 following a two-year absence, with Saab 340 flights operated by Link Airways. This is the same aircraft type used by Rex, but Virgin is offering more daily flights, well-appointed lounges in Sydney and Canberra, and a frequent flyer program. Virgin has also been largely matching Rex’s airfares. As a result, Virgin’s flights appear to have been consistently more full than Rex’s since both airlines have been operating on the route.

Qantas also operates regular flights on this route.

Rex previously announced when it initially launched Sydney-Canberra flights that it would open a new lounge at Canberra Airport in late 2021. It’s not clear if this is still on the agenda, but it would seem rather pointless to open a dedicated lounge now for just one daily flight to Melbourne.

Rex is currently using a temporary lounge space in the former international departures area of Canberra Airport. Rex Lounge guests in Canberra have reported that they had to pay for coffee and snacks – something that would not normally happen at a real airport lounge in Australia.

Rex temporary Canberra lounge
Rex’s temporary lounge at Canberra Airport. Photo: Rex.

You can discuss the end of Rex’s Sydney-Canberra route on the Australian Frequent Flyer forum: Rex launches Sydney-Canberra Saab 340 flights [now axed]

Rex axes Melbourne-Albury route

This weekend also marks the end of Rex services between Melbourne and Albury.

Rex’s Deputy Chairman predictably blamed Qantas for its decision to axe this route, making some rather pointed accusations in the process. Qantas began serving the Melbourne-Albury route in March 2021.

“This route is the casualty of Qantas’ illegal predatory behaviour to drive out competition in a war of attrition, knowing that its competitors do not have the balance sheet to lose money indefinitely,” Sharp said.

“Pre-COVID, 22,000 passengers a year flew between Albury and Melbourne, hardly enough passengers for one carrier let alone two. 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. Sadly for the community, we will soon see Qantas providing only a token service once it sees that it has achieved its objectives.”

The ACCC has previously refuted Rex’s claims that Qantas was engaging in illegal predatory behaviour.

Rex withdraws from 5 other routes

From late June 2022, Rex is also planning to cancel services on the following five routes:

  • Sydney-Bathurst
  • Sydney-Cooma/Snowy Mountains
  • Sydney-Lismore
  • Sydney-Grafton
  • Adelaide-Kingscote

Rex already announced in early 2021 that it would withdraw services on these exact same routes. But a few weeks later, it reinstated the flights after the federal government extended its Regional Aviation Network Support (RANS) funding.

Rex had also previously announced the cancellation of flights to Grafton in 2020 after a fight with a local council member. In that instance, the flights were also reinstated a short time later.

Bathurst’s local council has already commenced a tender process to find a replacement operator for Rex on the Sydney-Bathurst route. FlyPelican, which already operates routes such as Sydney-Cobar and Sydney-Mudgee, could be one candidate for this route.

QantasLink will operate seasonal flights to Cooma over the winter ski season and already serves the Adelaide-Kingscote route year-round.

 

Join the discussion on the Australian Frequent Flyer forum: Rex accuses Qantas of predatory behaviour, withdraws from routes

Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 90 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.
Matt Graham
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Jousams Feb 22, 2021 #1

Rex has put out yet another media release today accusing Qantas of predatory behaviour in launching flights on various former Rex monopoly regional routes.

Rex says that it has decided to keep operating on routes with new competition from QantasLink, even though they will be loss-making, and due to the losses it will sustain in doing so Rex will apparently have to cease services on five other marginal routes (which currently have no competitor) once government funding runs out in March:

  • Sydney-Bathurst
  • Sydney-Cooma
  • Sydney-Lismore
  • Sydney-Grafton
  • Adelaide-Kingscote

But at the same time, Rex says it will launch flights on two routes "where Virgin Australia has retreated", being Sydney-Coffs Harbour and Sydney-Port Macquarie. (I'm pretty sure VA still flies to Coffs Harbour?!)

According to Rex, other new routes under consideration, which are currently served by Qantas, are Sydney-Tamworth, Perth-Geraldton, Melbourne-Devonport and Sydney-Canberra.

View image at the forums


Rex to cut routes in face of Qantas ‘intimidation’

Qantas has hit back at Rex’s accusation of predatory behavour, saying the country airline is ‘throwing a classic Rex tantrum’.

View image at the forums


www.smh.com.au

I agree that SYD-CBR would make sense for Rex, since it's basically been abandoned by Virgin and still has lots of traffic. But I can't see Rex launching flights to Tamworth after saying in a press release last September that
"cities, such as Tamworth, which insist on charging security screening charges on carriers not legally required to be screened, will not be considered.”

Basically, it looks to me like Rex is now trying to hold five regional routes hostage as a political weapon to force the government and/or ACCC to either extend the RANS funding or take action against Qantas. This could get interesting.

rex is the boy who cried wolf. i wish the government would wake up to it....

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j jakeseven7 Feb 22, 2021 #2

Yawn, rinse and repeat PR dribble

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Mattg Feb 22, 2021 #3

Qantas has responded, calling this a "classic Rex tantrum".

Rex’s idea of competition is that it’s something that happens to other people, because they believe they have an enshrined right to be the only carrier on some regional routes.

The fact is Rex is receiving millions of dollars in bespoke government assistance for its regional operations at the same time as it’s acquiring new aircraft to fly between capital cities.

It feels like Rex is trying to blame Qantas for other challenges they may be having.

We don’t start routes if we don’t think they will be commercially viable for us.

We know that extra capacity and lower fares increases overall travel demand, which is good news for the regional communities we will be operating to.

We’ll be reviewing our network and consider whether we can offer services on any of the routes that Rex is threatening to pull out of.

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f flydoc Feb 22, 2021 #4

“We know that extra capacity and lower fares increases overall travel demand” (John Gissing)

Does it? What happened when QF & VA went head to head and flooded the market a few years back ? What happens to fares when there’s just not enough traffic for 2 operators and 1 pulls out as we’ve seen time and again?
It’s possibly a little more nuanced than A + B = C.

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d dajop Feb 22, 2021 #5

“We know that extra capacity and lower fares increases overall travel demand” (John Gissing)

Does it? What happened when QF & VA went head to head and flooded the market a few years back ? What happens to fares when there’s just not enough traffic for 2 operators and 1 pulls out as we’ve seen time and again?
It’s possibly a little more nuanced than A + B = C.

Agree.

Also, just looking at a few random dates. QF seem to charge the QF FF tax a price premium of about $30-$40 on the new routes. Rex have had relatively low “community fares” on many of its routes for some time. Interesting that QF is not matching these yet (perhaps it will during “sales”), so sort of makes a bit of a mockery of the lower fares piece, although admittedly there may be many more seats at the QF price level than before.

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j jase05 Feb 22, 2021 #6

Rex will apparently have to cease services on five other marginal routes (which currently have no competitor) once government funding runs out in March:

  • Sydney-Bathurst
  • Sydney-Cooma
  • Sydney-Lismore
  • Sydney-Grafton
  • Adelaide-Kingscote

QF has been running ADL-KGC for awhile

Reply 1 Like

Mattg Feb 22, 2021 #7

QF has been running ADL-KGC for awhile

You're quite correct. (I should know because I flew QF on that route last year!)

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henrus Feb 22, 2021 #8

But at the same time, Rex says it will launch flights on two routes "where Virgin Australia has retreated", being Sydney-Coffs Harbour and Sydney-Port Macquarie. (I'm pretty sure VA still flies to Coffs Harbour?!)

So they're willing to go "up against" Qantas on some routes where they think they can compete but not ones where they charge an arm and a leg plus a gold bar on top.

I agree that SYD-CBR would make sense for Rex, since it's basically been abandoned by Virgin and still has lots of traffic. But I can't see Rex launching flights to Tamworth after saying in a press release last September that

There is a reason why VA has abandoned it... they don't have a lot of gov/big biz contracts in Canberra and without these, there isn't much traffic between SYD-CBR.

I've never understood SYD-CBR to begin with, but in these times makes zero sense... You've got to spend time at an airport before boarding, on the plane sitting next to others, and then at the airport upon arrival. All of these places require wearing a mask and all of them put yourself at a greater risk of COVID (or being caught up in a COVID hotspot like MEL T4) whereas the drive is a simple 3hrs. Sure back in the day (pre covid), people would say international/domestic connections but with flights in/out of Sydney few and far between, it's quite hard to even connect in SYD right now.

Anyway back to Rex's antics... it's all quite incredible and I just wonder when it will stop...

The 737 launch is turning into an absolute flop (from multiple aircraft to just one at launch) and arguably they could even be accused of predatory pricing on the SYD-MEL route. Regionally, they run a fleet of aging ~20-30 year old props and charge a fortune but then complain when someone comes in and offers something better.

As Rex said themself Qantas is struggling and so the business is looking for new options domestically because that's all they can operate. The management must be stupid to think that Qantas is going to enter any sort of "collaborative partnership" especially since they're actively going after Qantas' bread and butter routes.

Finally, if it's not obvious the annoucment makes me angry, this really comes down to a case of smarter not harder. Take the two lowest routes in their first table, perhaps in these unusual times some out-of-the-box thinking is required...
Melbourne – Wagga Wagga : They already have flights from Wagga Wagga to Sydney and will soon have SYD-MEL so if you've only got ~150 people per month then make them connect if you can't compete.
Melbourne – Mount Gambier : Scrap the route and force people to connect via Adelaide - if they didn't burn bridges with Qantas/Virgin they could have had some codeshare or through ticket agreement.

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C Carrots Feb 23, 2021 #9

Their antics however seem to work more often than not (and frankly it's sad that it does).

Unsurprisingly, locally here in SA, the Opposition Party was quick to announce that the State Gov should throw Rex a handout to ensure they keep flying their twice weekly return flights to Kangaroo Island (versus the current QF 4 returns).

For SA, I wonder how long Rex will continue with Mt Gambier given the QF push on this route, and whether we'll see reductions/changes to the Pt Lincoln and Whyalla routes which QF also fly.

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themaiz Feb 24, 2021 #10

OK Rex: how about you start flying SYD/WTB, a route that QF was doing twice a day with suitably full Dash-8 planes, but has now abrogated entirely? Unless of course, you want to fly via CNS, take the whole day, and pay $2k return.

I'm tired of driving from Toowoomba to BNE at 5AM so that I can get back to Sydney for work. Hell, I'd even pay $200 to Rex instead of using a QF points claim.

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