Rex cuts flights to Kangaroo Island in latest blow to fire-ravaged community
Regional airline Rex is pulling its flights to Kangaroo Island, saying it’s been forced out by Qantas – as the community tries to rebuild after the huge bushfire crisis.
SA Business
Don't miss out on the headlines from SA Business. Followed categories will be added to My News.
- Capital raising drive to help get KI golf project off the ground
- The Advertiser +Rewards – giveaways, offers and competitions
Rex will axe its flights between Adelaide and Kingscote in the coming weeks in the latest blow to fire-ravaged Kangaroo Island.
The regional airline has cited “abuse of market power” by rival Qantas and has lodged a complaint with the Australian Competition and Consumer Commission.
Rex operates two return flights to Kangaroo Island each day, carrying about 37,000 passengers a year.
The regional airline on Monday said it planned to cease flights to Kangaroo Island and Ballina, 180km south of Brisbane, after Qantas had dumped “excessive capacity on routes that are already extremely marginal”.
“The direct impact of this conduct is to force out the smaller competitor and substantially lessen competition in the long term,” a company spokesperson said.
The news will come as another hit to Kangaroo Island, which is already suffering huge losses to its tourism and agriculture sectors following fires that ravaged about half of the region in December and January.
Tourism businesses have reported widespread booking cancellations for months in advance, prompting a campaign encouraging South Australians to back islanders by holidaying in the region.
Rex has complained to the ACCC about Qantas’s behaviour on three regional routes – the Adelaide to Whyalla journey, Sydney to Ballina route and between Adelaide and Whyalla.
It says it has no plans to axe flights to the Upper Spencer Gulf town.
“The excessive additional capacity introduced by Qantas on these routes kills the ability for Rex to offer a sustainable alternative to the Qantas model for regional communities and increases Qantas’ market power,” the spokesperson said.
The company said Rex was operating at 57 per cent capacity on flights between Adelaide and Kingscote when in December 2017, Qantas introduced new seats on the route.
It followed Qantas adding a new service between Adelaide and Whyalla in 2015, when Rex was already flying at 60 per cent capacity.
“Rex has to face up to the reality that it is not able to match Qantas’ financial firepower and unlike Qantas, Rex is not able to continue servicing a money-losing route indefinitely,” the spokesperson said.
“The Rex board has decided that in light of the sharp downturn experienced in the last six months and the poor economic outlook for the next 12 months, Rex will be exiting the Sydney to Ballina and Adelaide to Kangaroo Island routes in the coming weeks.”
Pierre Gregor, chairman of the Kangaroo Island Tourism, Food, Wine and Beverage Association, said Rex’s decision to pull its service would hurt tourism and business.
MORE NEWS
#BookThemOut push to help a tourism recovery in bushfire areas
Trapped in a raging firestorm on Kangaroo Island: See the video
“The SA Tourism Commission and everybody is doing the best they can to market Kangaroo Island as a destination and now an airline is going to drop out – that’s just nuts,” Mr Gregor said.
A Qantas spokesman said it was a “sad state of affairs” that Rex was blaming it for pulling out of the island.
“We’re focused on adding new routes to regions that we think have genuine growth potential,” the spokesman said.
“That includes stimulating those towns with more capacity, which helps build momentum and can grow the size of the pie over time.”
Mayor Michael Pengilly said Rex’s decision was “hugely disappointing”.
“It’s about the last thing we’d expect on top of everything that’s happened," he said.