Rex cuts five airline routes, accuses Qantas of ‘predatory’ behaviour

Qantas has been accused of trying to kill off a campaign by rival Rex to become Australia’s third domestic airline.

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

Qantas has been accused of trying to kill off a campaign by rival Rex to become Australia’s third domestic carrier by targeting the regional airline’s usual market.

Rex will operate its first ­Sydney-Melbourne services next Monday, going head to head with Qantas and Virgin Australia on Australia’s most lucrative route, after 20 years of flying only ­regional routes.

However, Rex deputy chairman John Sharp said Qantas was using its size and capacity to try to undermine their position, and called on the competition watchdog to step in.

He said dozens of extra flights being scheduled by Qantas on routes such as Sydney-Orange, Adelaide-Mount Gambier and Melbourne-Merimbula were unnecessary and designed simply to weaken Rex.

“Since it became known we were going to start a domestic service, they’ve started putting ser­vices into towns where they know they’re losing money but they’re doing it with the intention of trying to bully us out of the market and to stop us from competing or weaken us so we’re not as strong a competitor,” he said.

“That’s their tactic and that’s the way they play their game.”

Since the start of the pandemic, Qantas has announced 26 new routes, eight of which are also operated by Rex.

In response to Qantas’s ­expansion, Mr Sharp said Rex would have no choice but to axe a number of underperforming routes when government assistance ended in late March.

These included Sydney to Cooma, Bathurst, Lismore and Grafton, and Adelaide to Kangaroo Island, which were typically subsidised by more profitable routes in Rex’s network.

“Qantas, by doing what they’ve done, basically puts us in a position where they’ve taken the cream off our profits. Without those profits on those routes, we can’t sustain the poorer routes,” said Mr Sharp, a former National Party MP and minister in the Howard government.

His concerns were backed by NSW Deputy Premier John Barilaro, who said it was clear Qantas was trying to cripple Rex, motivated by its “own narrow commercial interest”.

“Qantas, the self-proclaimed ‘Spirit of Australia’, is the first to pull on our patriotic heartstrings but in the same breath sabotages a rival airline, failing to consider the long-term impact on a regional community who depend on vital air services,” the NSW Nationals leader said.

“Rex in its DNA is a regional and rural airline, and it is doing its best to fill the gaps left by Virgin, while Qantas is trying to cripple Rex before it even gains a foothold in some markets.”

Qantas rejected the accu­sations, calling opposition to the airline’s presence on regional routes “a classic Rex tantrum”.

QantasLink chief executive John Gissing said the airline did not start new routes if they didn’t think they would be commer­cially viable. “Rex’s idea of competition is it’s something that happens to other people, because they believe they have an enshrined right to be the only carrier on some ­regional routes,” he said.

“The fact is, Rex is receiving millions of dollars in bespoke government assistance for its ­regional operations at the same time as it’s acquiring new aircraft to fly between capital cities.”

He said it felt like Rex was trying to blame Qantas for “other challenges they may be having”, alluding to poor ticket sales on Sydney-Melbourne routes.

An Australian Competition & Consumer Commission spokesman said they were aware of Rex’s concerns and would continue to monitor the airline industry as it recovered from COVID.