By Mike Mangano
Australian Airline Rex To Cease Selected Flights
Australian regional airline Regional Express this week announced it will cease two flights as it encounters increased costs and competition. The services, Sydney-Canberra and Melbourne-Albury, will be ceasing on Monday, May 30.
Rex, as Regional Express is better known, has been facing challenges of increased costs and competition from both Sydney Airport and airline giant Qantas, respectively.
The Sydney-Canberra route was added to Rex’s expanding operations last year, having commenced April 2021. Despite the year-long service adding increased competition to the route, the airline says its operations between Australia’s largest city and its capital are no longer practical.
Speaking of the route, Rex Deputy Chairman, the Honorable John Sharp AM, said: ““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.”
The cessation of operations between Melbourne-Albury appears to be based on more than increased costs alone, with the airline pinning the blame on Qantas. In a statement, Sharp said, “This route is the casualty of Qantas’ illegal predatory behavior to drive out competition in a war of attrition, knowing that its competitors do not have the balance sheet to lose money indefinitely.”
Elaborating on Qantas’ actions, Sharp stated, “Pre-COVID, 22,000 passengers a year flew between Albury and Melbourne, hardly enough passengers for one carrier let alone two,” adding that during the COVID pandemic Qantas entered the route, “dumping an additional 31,000 seats annually into the market.”
The move, according to the airline, is another brick in what Rex sees as an anti-competitive wall. Having operated the route for 39 years, Sharp said: “Sadly for the community, we will soon see Qantas providing only a token service once it sees that it has achieved its objectives”, an opinion shared by many after the recent shortcomings of Qantas.
Last year, Rex commenced legal action against Qantas after Rex raised complaints about “Qantas’ willingness to enter loss-making routes in competition with Rex in an effort to intimidate Rex into not commencing domestic operations.”
Despite the cessation of the two routes, Rex has recently expanded some of its operations, including internationally. The regional airline announced on May 2, 2022, that it had signed a letter of intent to partner with the US carrier Delta Air Lines. The move, which will see a reciprocal ticketing and baggage service between Rex and Delta, is slated to commence in the third quarter of this year.
Rex, which currently offers over 60 Australian routes, will provide a seamless connection for its passengers bound to the US. From December 18 this year, Delta will increase its flights to a frequency of 10 per week between Sydney and Los Angeles, from which Rex passengers can then seamlessly fly to nearly 50 cities in the US.
The partnership between Rex and Delta will give Rex the edge it needs to compete with what appears to be an increasingly monopolized Australian airline sector. According to Delta’s Vice-President – Alliance Partner Development, Jeff Arinder, Delta Airlines “look forward to welcoming more customers to our flights from Sydney to the U.S. and providing a world-class customer experience in the air and on the ground.”