Rex cuts more regional flights amid Qantas ‘bullying’

The airline is withdrawing from another five regional routes with more likely to follow in a bid to boost profitability as it battles for market share against Qantas.

Rex says it has no choice but to withdraw from flying to another five regional centres thanks to the “predatory actions” of Qantas. Picture: Supplied.

Regional Express airlines has confirmed its withdrawal from another five regional centres when federal government subsidies come to an end of June.

Flights from Sydney to Grafton, Bathurst, Lismore and Ballina, and Adelaide to Kangaroo Island will cease from then, and Rex indicated two other routes were under review.

They are believed to be Sydney-Cooma and Sydney-Parkes.

The culled routes were subsidised by the Regional Airline Network Support scheme developed during the Covid-19 pandemic to maintain crucial air links to country areas.

Rex previously announced its intention to stop flying Melbourne-Albury and Sydney-Canberra due to excess capacity on the routes.

On Monday, Rex deputy chairman John Sharp said the airline had faithfully served those regional centres for up to 30-years with predecessor airlines Kendell and Hazelton.

“So it is with a really heavy heart we have to announce the cessation of services in an effort to improve Rex’s financial performance,” said Mr Sharp.

He blamed Qantas’s “well-publicised predatory actions on Rex’s regional routes” for quashing the smaller airline’s ability to cross-subsidise marginal routes.

“It is unfortunate these regional communities are the collateral damage of Qantas’s bullying and heartless behaviour,” Mr Sharp said.

“This behaviour is all the more unconscionable after receiving more than $2bn in federal bailouts over the last two years.”

Rex also received significant funding support from governments during the pandemic, totalling $175m, or more than half of the airline’s pre-Covid revenue.

The carrier’s remaining regional network was being closely monitored and further adjustments were expected in coming months.

A Qantas spokeswoman dismissed any suggestion the airline was engaging in “predatory behaviour” on regional routes.

Qantas did not operate on three of the five routes from which Rex was withdrawing, and was one of four airlines flying Sydney-Ballina.

“Rex is always looking to blame others when it withdraws from regional routes, but none of

its claims stack up to scrutiny,” said the spokeswoman.

“Rex has a monopoly on three of these routes it’s abandoning, so if it can’t make them work,

it has no-one else to blame but itself.”

Since early 2021, Rex had begun adding Boeing 737s to its fleet to operate major city routes including flights between the Golden Triangle of Sydney, Melbourne and Brisbane and services to the Gold Coast and Adelaide.

A seventh jet was due to join the Rex fleet soon, funded by a $150m arrangement with Asian private equity firm PAG.

The Qantas spokeswoman questioned why Rex could not cross-subsidise its regional routes but seemed to have no problem finding money to invest in more aircraft for its major city services.

“That must be confusing for regional customers given Rex’s tagline is that their ‘heart is in the country’,” said the spokeswoman.

“Rex’s claims against Qantas have become so far-fetched, we had to create a dedicated

page on our website to rebut them and update it on a fairly regularly basis as they cook up

more weird conspiracy theories.”

Another competitor was expected to enter the market later this year with low-cost carrier Bonza aiming for a September start.

Initially operating three new Boeing 737 Max 8s, the airline planned to fly mostly regional routes currently unserviced by other carriers with fares starting from around $50.