Virgin Australia matches Rex ‘cab fare’ tickets

Virgin Australia has matched Rex’s $49 fares on Melbourne-Sydney services as an airfare war heats up.

Rex sent its 737 over Sydney's CBD to mark Australia Day 2021 and promote its upcoming flights from Melbourne to the city. Picture: Joe Corrigan

Virgin Australia has dropped its own fares on Sydney-Melbourne flights to match those of rival Rex which will launch services on the route from March.

Rex announced its $49 one-way fare on Wednesday in an effort to stimulate bookings, and within hours Virgin Australia moved to drop its own sale fares to equal the newcomer.

Both carriers are also selling business class seats on the route for $199 one-way.

The bargain fares are on sale until the end of February for travel in March only, and include checked and carry on baggage.

A Virgin Australia spokesman said they had “been inspired to look at new ways to push the envelope when it came to stimulating the market and getting Australians back in the skies again”.

“Today, we’ve raised the bar even higher – matching some of the lowest airfares in the market – complete with checked-baggage, seat selection, double Velocity Points on eligible bookings and of course, our award-winning service,” said the spokesman.

Rex deputy chairman John Sharp said the cheap fares presented “a wonderful opportunity to get between Australia’s two biggest cities on a whim to get over the COVID blues”.

“Most taxi rides to the airport cost more than $49,” Mr Sharp said adding that Rex also guaranteed a full refund in the event of flights being affected by COVID-19.

The $49 fare undercut sale fares offered by Qantas and Jetstar, by more than half.

In an effort to reinvigorate demand decimated by COVID-19 and snap border closures, Qantas and Virgin Australia have acknowledged travellers want more than cheap fares to book flights.

Both have extended no change fee policies until 2022 to give travellers confidence they can move their flights at no extra cost if needed.

Qantas has also upgraded its in-flight service in the economy cabin to include complimentary beer and wine from midday and a hot meal option at breakfast and dinner.

In response, Virgin Australia has launched a double Velocity points campaign until next Wednesday, as an added sweetener to book a flight.

“We look forward to giving more Australians the opportunity to fly again, to go on holiday, to reunite with family and friends and to do business, thanks to cheaper fares, free flexibility and double Velocity points,” a Virgin Australia spokesman said.

From March 1, Rex will operate nine return flights a day between Melbourne and Sydney, using Boeing 737s, with eight ­business-class seats and 168 in economy.

It’s unclear if the extra capacity will be needed, with Qantas and Jetstar offering a total of 40 return services a day and Virgin Australia 18 return flights.

The major carriers are still yet to ramp up to pre-COVID levels, when more than 100 flights operated between Melbourne and Sydney each day.

With Rex planning to increase its fleet of 737s to five by April, and as many as 10 by year’s end, Mr Sharp said it would have the ability to adjust services in response to demand.

“We’re starting very small and as the market grows, we’ll keep ­dialling it up by adding extra aircraft and extra crews — we’ll only do that as demand requires it,” he said.

“We’re in a much more nimble position than our competitors.”

Services to Queensland were expected to start after Easter to complete the “Golden Triangle”, so called due to the heavy business traffic normally carried between Sydney, Melbourne and Brisbane.

Rex’s expansion is being funded to the tune of $150m by PAG Asia Capital, which will hold a 48 per cent share in the airline once the deal is complete.

Mr Sharp said the carrier’s 59-destination regional network, operated by a fleet of ageing Saab 340s, would continue to be at the core of its business.