Rex fury as Qantas launches new regional routes

Rex (Regional Express) has called on Australia’s federal government to cease all funding for Qantas, expressing “grave concerns that Qantas is embarking on an opportunistic strategy of flooding the regional airline market with additional excess capacity to eliminate weaker regional competitors”.

Qantas on Friday announced a major expansion to its regional network, adding seven new routes across New South Wales, South Australia and Victoria, “in response to customer demand”.

Qantas developments include:

• Seven new routes and two new destinations added to Qantas’ network;
• More flights added to existing markets, “in response to demand”;
• New direct flights from Sydney to Merimbula begin;
• Influx of frequent flyers from other airlines switching to Qantas.

Rex says it fears this will have “devastating long-term impacts on regional aviation”.

“History has shown that once regional airlines are squeezed out, the loss is permanent and regional and rural communities suffer the consequences,” Rex stated.

According to an issued statement by Rex: “Qantas is choosing to incur huge losses on these routes, using Commonwealth government subsidies to finance a strategy that will destroy incumbent regional operators.

“A case in point is its foray into the Sydney-Orange market, which is barely big enough for one operator, with a pre-Covid patronage of 65,000 annual passengers. Since its start of operations on 20 July 2020, at the height of the pandemic in Australia, it managed an average of only 10 passengers per flight, even for only 2 return services a week!”

Rex continued: “Some of the other thin regional routes that Qantas has started or has announced that it intends to start are:

• Adelaide-Kangaroo island (annual passengers pre-Covid 41,000)
• Sydney-Merimbula (annual passengers pre-Covid 36,000)
• Melbourne-Mount Gambier (annual passengers pre-Covid 36,000)
• Adelaide -Mildura (annual passengers  pre-Covid 5 500).

Rex claimed it was clear “that Qantas is very worried about Rex’s entry into the domestic market as it is well aware of Rex’s superior efficiencies and on-time performance.”

The Rex statement said the actions by its competitor were “clearly anti-competitive and particularly unconscionable at a time when Qantas is receiving almost one billion dollars of Federal assistance, while laying off thousands of workers under the pretext of reducing losses.

“Rex calls on the Federal Government to cease all grants to Qantas if it persists with this opportunistic behaviour. The ACCC has been alerted to these actions and we now call on the Federal Government to issue a second Direction to the ACCC to provide it with more specific powers that will protect new entry and expansion, and that will bring greater competition to the domestic market at a time when the aviation industry is particularly vulnerable to aggressive behaviour that entrenches the market power of the dominant carrier.”

Rex said the Federal Government should be aware that Qantas’ actions “will have a long-term negative impact on regional aviation”.

“If Qantas succeeds in driving Rex away from these routes, there is every possibility they will never have a regional service again when they are no longer relevant to Qantas.”

Qantas has confirmed it will be flying to five more destinations across Australia than it was pre-Covid (up from 57 to 62). The airline has also begun flying direct from Sydney to Merimbula on the New South Wales Sapphire Coast for the first time, announced in October.

NEW QANTAS ROUTES 

Qantas is offering special fares for flights on the new routes from $125 one-way, available at qantas.com or through Travel Agents, until 20 December 2020, unless sold out prior.

The flights will largely be operated by the airline’s 50-seat Q300 turboprop aircraft, with upgraded cabin interiors, adding more than 320,000 seats to these regional destinations each year.

Qantas has already introduced a number of initiatives to encourage customers to book with greater flexibility, as well as to improve safety and peace-of-mind when travelling domestically through its Fly Well program

ADDITIONAL FLIGHTS BY QANTAS

• Melbourne-Gold Coast weekly flights will double – from daily to twice daily – from April 2021 with the new schedule to cater for both corporate and leisure travellers.
• Sydney-Orange flights will increase from three days per week to daily from February 2021.
• Melbourne-Launceston flights will be upgraded from a Q400 aircraft to a larger Boeing 717, adding more than 400 seats on the route each week.
• A number of seasonal routes originally scheduled for the summer have been extended to operate year-round, including Perth-Hobart, Canberra-Hobart, Sydney-Merimbula and Brisbane-Port Macquarie.

QantasLink chief executive John Gissing said these new routes were a great opportunity for travellers to explore the best of regional Australia.

“As the national carrier, we have an important role to play in driving tourism and supporting the industry’s recovery,” Gissing said.

“Before COVID, more than 11 million Australians travelled overseas each year, so these flights will help convert some of these international trips into domestic holidays instead.

“We know there is significant pent-up demand for travel. These new flights will help more Australians explore some of the incredible places in their own backyard and drive tourism, which is so vital to the local economies of regional areas.

“We’ll be promoting these new flights to millions of our frequent flyers across the country in the lead up to the flights commencing next year.

“We’re also pleased to be able to offer locals more choice and competitive fares on these routes, most of which have been monopolies for years.”

Since domestic border restrictions started to ease in July, Qantas has announced or commenced flying on 13 new routes across Australia. Today’s announcement brings that number to 20.

Qantas has been progressively “waking up” its domestic and regional aircraft to support this new flying, with the vast majority of the airline’s regional fleet expected to be operational by early 2021.

“All our aircraft carry fixed costs, regardless of whether they’re grounded or not. We’d rather get as many aircraft back in the air as we can because it’s better for our business, our customers and gets more of our people back to work,” Gissing added.

Qantas flights continue to have complimentary baggage and food and drink included with every seat. The airline has now opened 30 of its 35 domestic and regional lounges across its network.

Today is the last day to register for Qantas’ Status Fast Track initiative that has seen thousands of members from other airlines switching to Qantas Frequent Flyer to take advantage of the national carrier’s extensive lounge and flying network.

Qantas is also offering customers the opportunity to join its Frequent Flyer program for free until 31 January 2021 via qantas.com/freejoin. Travellers will be able to earn Qantas Points and Status Credits on the new routes as well as using their points to book flights.

Edited by Peter Needham