Rex challenges Qantas on Sydney-Canberra route

Rex has fired the latest shot in its war with Qantas, announcing cut-price flights between Sydney and Canberra, where the flying kangaroo has a monopoly.

Regional Express (Rex) deputy chairman John Sharp pictured at their headquarters in Mascot, Sydney. Picture: Britta Campion

Regional Express has fired the latest shot in its ongoing war with Qantas, announcing cut-price flights between Sydney and Canberra where it’s accused the flying kangaroo of price gouging.

From April 19, Rex will offer seats at $99 one-way on the route, which is about half the price charged by QantasLink.

Prior to the COVID pandemic, more than 900,000 passengers a year flew between the two cities a year, with the cheapest fares averaging $316, according to federal government data.

Rex deputy chairman John Sharp said the airline believed it was time passengers had a choice of operator on the business-heavy route.

“My last trip on Qantas between Sydney and Canberra cost me $1100 return and that was in economy so you could argue quite reasonably that Qantas has been gouging, and getting their monopoly rents out of the Sydney-Canberra route because they’re the only operator,” Mr Sharp said.

“Rex coming in will change that and deliver huge savings to passengers.”

A Qantas spokesman welcomed competition on the route, which used to be flown by Virgin Australia until fairly recently.

“Our lead-in fares on the route haven’t changed since then and we’ve recently had sale fares for as low as $109,” the spokesman said.

“Just as we have done for decades, we will continue providing a high quality and reliable service with regular flights available throughout the day between Sydney and Canberra for government, corporate and leisure travellers.”

Rex will use its 34-seat Saab 340s on the route and fly seven return services a day, with a view to going up to ten daily.

Mr Sharp said the Saab 340s were “not that different” to the Dash 8s operated by QantasLink and Rex would offer eligible guests lounge access in both Canberra and Sydney.

“Turboprops are the most economic way of operating in order to provide a schedule that gives frequency, which is what passengers want,” he said.

It was likely Rex would look at challenging Qantas on other routes where the larger airline had a monopoly, in addition to other new services such as Sydney to Coffs Harbour and Port Macquarie, Melbourne to Adelaide, and Sydney and Melbourne to the Gold Coast.

“It’s a case of trying to operate services, taking advantage of our lower cost base and moving into the markets where there are sufficient numbers of passengers to warrant more competition,” said Mr Sharp.

“We think everyone of those new routes we’re going into – Coffs, Port Macquarie – have more than enough passengers to warrant more competitors and we believe with our lower cost base we can compete very viably in those larger volume routes.”

Earlier this year, Rex lodged a complaint with the Australian Competition and Consumer Commission, accusing Qantas of predatory behaviour following moves into a number of regional routes, such as Melbourne-Merimbula and Adelaide-Mt Gambier.

The complaint suggested Qantas was trying to weaken Rex so it was unable to compete with the larger carrier on the lucrative Golden Triangle of Sydney-Melbourne-Brisbane.

A recent report by the ACCC all but dismissed Rex’s concerns, suggesting Qantas was bringing competition to routes and was not operating the flights at a loss.

Mr Sharp said subsequent discussions with the ACCC had been positive.

“The message we’re trying to get across is competition in once place can have a negative effect elsewhere in the network and is it unfair competition as a result of that?” he told The Australian.

Canberra Airport CEO Stephen Byron said Rex’s flights to Sydney were a welcome addition.

“This new Canberra-Sydney route (by Rex) will offer more choice for our travellers, stimulate jobs and grow the air travel market which is a win-win for us all,” Mr Byron said.

The new flights will go on sale later this week.