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Australia’s Rex announces new regional route strategy

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Australian airline, Regional Express Airlines, better known as Rex in Austalia, announced earlier this week that it would be implementing a “new regional network strategy,” which is poised to make the airline better placed in the Australian regional market. The new plan will act as a safeguard for the carrier against its competition, describing recent actions from larger airlines, such as Australian flag carrier, Qantas and its regional subsidiary, QantasLink as “predatory behaviour.”

In order to implement this new strategy, Rex will cut a number of loss-making regional routes with low passenger numbers. At the same time, the carrier will use this freed-up aircraft capacity to launch two new routes which were dumped by Virgin Australia during its administration period in 2020. The full list of routes being cut from Rex’s network includes routes from Sydney to Bathurst, Cooma, Lismore and Grafton as well as a route from Adelaide to Kangaroo Island. In a statement regarding the new network strategy, Rex Chairman, John Sharp described the passenger numbers on these routes as “laughable, even if they return to pre-COVID passenger numbers.”

However, in addition to cutting the above five routes, Rex also sees opportunities in a number of routes that were removed by Virgin Australia as part of its cost-cutting measures during 2020. According to Chairman John Sharp, Rex will begin operations in April on two new routes which Qantas are now the dominant carrier on. Specifically, these will be from Sydney to Port Macquarie and Sydney to Coffs Harbour. Sharp hopes these two new routes will assist the airline in creating healthy profits and driving competition in the regional airline market. In a statement seen by AeroNewsX, the Chairman confirmed that the airline will only launch these new flights, “once a partnership agreement is concluded with the local councils or airport owners.”

Regional Express (Rex) Saab 340B
Regional Express (Rex) Saab 340B aircraft registered VH-ZXS. Photo by Duy Khang Tran | AeroNewsX.

In addition to these two firmed up routes, Rex is also considering launching a number of other key regional routes which only have one dominant carrier. The airline speculated that routes such as Sydney to Tamworth, Perth to Geraldton, Melbourne to Devonport and Sydney to Canberra could be destinations for the airline in future, as they all offer high yields and passenger numbers for the carriers which currently operate on them.

Rex also took aim at the well recognised Australian airline, Qantas in a recent press statement seen by AeroNewsX. The regional carrier was very critical of Qantas for launching what it called “a pre-emptive strike against smaller carriers” and was taking advantage of the COVID environment while the carrier “is receiving massive payments to stay solvent,” according to Rex Chairman, John Sharp. Rex also took the opportunity to call on the ACCC (Australian Competition and Consumer Commission) to take action against Qantas to prevent it from further using its market position as Australia’s largest airline to drive smaller carriers out of the market.

The comments from Rex come after Qantas launched competing services on a number of routes where Rex was previously the sole carrier such as Melbourne to Albury, Sydney to Orange and Adelaide to Mount Gambier. The launch of competing services caused a significant decline in passenger numbers for Rex. The carrier is currently not able to provide domestic connections unlike Qantas, until the launch of its Boeing 737 services, which are scheduled to commence on the 1st of March. However, rather than cut these routes, John Sharp has stated Rex will stick it out for the time being, in order to provide competition to the market, despite the routes not being able to viably support two competing airlines. This demonstrates a marked change from Rex’s pre-COVID strategy, which was all about positioning itself to be the only carrier on routes it operated, now all eyes are on Regional Express Airlines as it launches its new regional network strategy.

The post Australia’s Rex announces new regional route strategy appeared first on AeroNewsX.

Source: https://aeronewsx.com/australias-rex-announces-new-regional-route-strategy/?utm_source=rss&utm_medium=rss&utm_campaign=australias-rex-announces-new-regional-route-strategy

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