Fare war looming on Golden Triangle as Qantas seeks more frequent flyers

Qantas is making another bid for the most loyal passengers of other airlines as competition heats up in the domestic market.

Rex is a step closer to its stated goal of servicing the Golden Triangle with plans to commence Melbourne-Brisbane flights from December.

As flying takes off once again, airlines are jostling for domestic market share with new routes, cheap airfares and loyalty offers.

In the biggest move, Rex announced an expansion of its capital city network with the addition of Melbourne-Brisbane services from December 17.

The double daily flights using ex-Virgin Australia Boeing 737s went on sale on Monday for $79 one-way, drastically undercutting the competition.

Rex deputy chairman John Sharp hinted there would be more to come, as the airline dusted off its six Boeing 737s, in preparation for a busy summer holiday season.

“We’re determined to make up for time lost due to the pandemic and push ahead with plans to expand our network, particularly in Queensland,” Mr Sharp said.

The Rex move was expected to trigger an airfare war on the route, which was Australia’s third busiest before the Covid pandemic hit, carrying 3.5 million people a year.

Qantas was more fixated wooing the most loyal passengers of other airlines, with its third “status fast track” offer in a year.

Under the initiative, top tier members of rival airlines’ loyalty programs were being wooed with the promise of gold status with Qantas.

The only catch was they would have to obtain 100 status credits before February 28, 2022, the equivalent of taking five return economy flights between Sydney and Melbourne, or a one-way business class flight to Singapore.

Qantas Loyalty CEO Olivia Wirth said the offer was in response to demand, with the airline fielding requests from about 1500 members of other programs to have their status matched by the flying kangaroo.

“With so many Qantas frequent flyers using the points they have been stockpiling during the pandemic to book an overseas trip, there’s a lot of FOMO (fear of missing out) from members of other loyalty programs who don’t have nearly as many options,” said Ms Wirth.

“We know there are a lot of people who missed out when we did this previously, so if they’re willing to come across to Qantas, we will fast track them to gold status.”

She said the airline was already flying to London and Los Angeles, and over the next few months would restart services to Singapore, Johannesburg and Hawaii.

“Throughout the pandemic we’ve had amazing support and loyalty from our members and we are repaying that loyalty by making it easier to access reward seats on domestic and international flights and providing new ways to earn and redeem points,” Ms Wirth said.

Although Rex could not match Qantas’ international network, Mr Sharp said the airline would continue to put downward pressure on fares in the domestic market.

He said other routes launched by Rex with low starter fares had sent their rivals into a tailspin.

“Every time we’ve entered a new market, airfares have fallen dramatically as Qantas and Virgin Australia scramble to match our prices and I have no doubt this will be the case again,” Mr Sharp said.

“Consumers are the big winners from competition and Rex will continue to champion the cause of safe, reliable and affordable air travel.”

Despite having just six Boeing 737s, Mr Sharp was confident the airline could reliably operate six major domestic routes over the summer.

The narrow body jets were scheduled to fly Melbourne-Sydney, Melbourne-Adelaide, Melbourne-Canberra, Melbourne-Gold Coast, Sydney-Gold Coast and Melbourne-Brisbane services from December 17.

“Our intention was to have another two and possibly four 737s by this time but the border closures and lockdowns caused us to delay those deliveries,” Mr Sharp said.

“It’s still our intention to add more aircraft as demand grows but that won’t happen this year.”

The new year could bring more competition as US-backed budget carrier Bonza prepared to takeoff.

Bonza planned to use brand new Boeing 737 Max 8s on mostly regional routes, starting with a fleet of two or three, similar to what Virgin Blue did in 2000.

The carrier was yet to secure an air operator’s certificate from the Civil Aviation Safety Authority but the process was underway.

Mr Sharp said they were not overly concerned about the prospect of a fifth airline on the domestic scene, suggesting Bonza still had many hurdles to overcome.

“It’s extremely difficult when you’re starting from scratch. They don’t have any systems, any people, any departments. They’ve got to start from the very bottom of the mountain,” he said.

“It’s worth pointing out, and I’ve been in the business a long time, and every couple of years someone does come along and tries to start an airline and it’s always a lot harder than people think.”

He said Bonza would also find it hard to “do better” than a $79 one-way fare for a route like Melbourne-Brisbane.

“It’s extremely difficult to get much lower than that.”