Aussie regional Rex unveils strategy to take on Qantas

Australian regional airline Regional Express (Rex) has finally unveiled its strategy to enter the domestic air travel market, and fly capital city routes between Australia’s largest east-coast capitals: Sydney, Melbourne and Brisbane.

Rex has confirmed it will initially operate nine return services a day between Sydney and Melbourne, known for being one of the most lucrative routes in the world, beginning 1 March 2021.

It will then tackle the so-called ‘golden triangle’ when it adds Brisbane to its capital city network in the months following.

The airline claims it will cost customers as little as $79 for a one-way ticket.

Simultaneously, the airline has also revealed its ‘new’ livery that will embellish its recently-acquired Boeing 737s, which appears very similar to that which brands its current fleet of mostly Saab 340s turboprops.

Rex deputy chairman John Sharp said on Wednesday, “The first three Rex Boeing 737-800s will take off between Sydney and Melbourne on 1 March 2021.

“Rex will begin with nine Sydney-Melbourne return services a day. By Easter, two additional 737s will be added to expand our domestic network to Brisbane and other capital cities. If all things go as planned, we hope to grow our fleet to 8-10 by the end of 2021.

“Rex will offer all the usual perks of a full-service carrier including eight Business Class seats. All fares include checked baggage allowance, food, pre-assigned seating, and online check-in. Lounge access and on-board Wi-Fi will be free for Business Class, whilst Economy passengers can access these options for a small fee.”

The ex-regional player hopes to break the ongoing duopoly of Australian flag carrier Qantas and rival Virgin Australia, who dominate the domestic scene.

Shorly after Virgin Australia entered voluntary administration earlier this year, Rex made its grand announcement; that it would expand into capital city domestic routes, acquire Boeing 737 aircraft (utilised by both Virgin and its now-defunct budget arm, Tigerair) and pursue a ‘mid-market’ hybrid strategy with economy tickets including checked baggage, food and pre-assigned seating.

Rex only last month signed off on a $150 million investment that will allow it to expand its operations to fly capital city routes with six leased Boeing 737s.

The airline will draw down an initial $50 million in January next year from PAG Asia Capital and the deal will see the APAC organisation nominate two directors to sit on the board.

“Once the initial services are well established, we aim to progressively grow our fleet to cover all the major cities in Australia,” said Rex executive chairman Lim Kim Hai.

“PAG is a well-respected and highly successful investment group which manages more than US$40 billion on behalf of major global institutional investors.

“Preparations for our domestic operations are proceeding to plan with our first Boeing 737 800NG aircraft delivered on 5 November 2020. Our crew will carry out training on the aircraft over the next three weeks before the CASA proving flight on 2 December 2020.”

Last month, Australian Aviation photographer Lenn Bayliss photographed Rex’s first 737 shortly after it had its old Virgin livery removed at Wellcamp before the regional airline took delivery of it in Sydney on 5 November.

The plane has been flying back and forth between Sydney and Melbourne, likely in preparation for its CASA proving flight on 5 December.

Rex’s timing is likely to cause alarm for rivals Virgin and Qantas, which have both been celebrating record sales as state borders between the country’s largest eastern state re-open after months of closures.

By placing itself in the mid-market, Rex serves as a threat to both incumbent Aussie airlines.

Additional reporting by Adam Thorn