Rex steps up fares fight with Qantas

Rex has made good on its threat of legal action against Qantas appointing a high profile law firm to pursue the national carrier.

Rex deputy chairman John Sharp. Picture: Mark Brake

Rex has elevated its threat of legal action against Qantas, appointing high-profile law firm Clayton Utz to explore all legal avenues to stop what it claims is anti-competitive behaviour by the bigger airline.

The move follows complaints by Rex to the Australian Competition & Consumer Commission, which is yet to find grounds to act against Qantas.

Rex said Fred Prickett would lead the litigation team in pursuing “all legal remedies in response to Qantas’s (alleged) predatory and anti-competitive behaviour”.

Rex has claimed Qantas deliberately launched loss-making services on routes operated by the smaller carrier to weaken its competitor. Of 45 new routes announced by Qantas since the suspension of international flights in March last year, 11 were in competition with Rex.

The airline’s deputy chairman, John Sharp, said Qantas’s “willingness to lose money simply to weaken Rex was all the more immoral and unconscionable at a time when it was already beneficiary to billions of dollars of state and federal assistance and lobbying for more bailouts”.

“Rex’s initiative today signals its intention to stand up strongly for the Australian consumers to put a stop to Qantas’s actions that are calculated to limit or prevent competition as this will inevitably result in higher fares and poorer service for consumers,” Mr Sharp said.

Qantas has previously insisted it would not engage in a “war of words” with Rex and did not respond to the airline’s announcement about the appointment of a law firm on Monday.

Rex has claimed Qantas deliberately launched loss-making services on routes operated by the smaller carrier to weaken its competitor. Picture: NCA NewsWire/James Gourley

The ACCC is continuing to monitor airlines’ behaviour during the pandemic, with quarterly reports updating its findings.

In the most recent report for the March quarter, commission chairman Rod Sims said it was assessing the impact on competition of expanding capacity and discounting fares on certain routes. “Increasing capacity to meet demand and offering discounted fares is generally a sign of competition and is good for consumers,” Mr Sims said.

“However, the ACCC will consider taking enforcement ­action if capacity and pricing decisions materially damage competition, including by preventing rivals from competing effectively, or driving a competitor off a route or out of business.”

Rex has alleged Qantas’s embrace of new regional routes was in retaliation for the smaller carrier’s expansion into capital city domestic routes using former Virgin Australia aircraft.

The six Boeing 737s are currently grounded while Rex navigates the brutal fallout from lockdowns and border closures that have cut flying on major routes to skeleton services.

While Qantas was expected to record a loss of $2bn in the 2021 financial year, Rex was facing a $15m loss, following a $9.9m gain in the first half.

Rex is also battling to retain its contract to operate regulated routes in Queensland, with Cairns-based operator SkyTrans hoping to take over the rural and outback services next year.

Originally published as Rex steps up fares fight with Qantas