New Australian mainline contender Rex is consolidating its beachhead in the nation’s capital with a twice-daily return Melbourne-Canberra service operated by a Boeing 737-800.

The new service will begin operating from June 10 with lead-in fares of $A69 one-way, a level the airline says is $123 cheaper than ticket prices identified by federal government statistics in May.

It joins the carrier’s seven daily return flights to Sydney using its Saab 340 turboprops.

Rex has been in a slanging match with major competitor Qantas and Tuesday’s announcement was no exception.

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The carrier again attacked the bigger airline’s pricing with claims return ticket prices charged by the Flying Kangaroo on the Melbourne-Canberra route can top $A900.

“Qantas has perfected the art of price gouging, ripping off passengers with sky-high fares on a  route with only a weak competitor to keep it honest,” Rex deputy chairman John Sharp said in a statement.

“This will now change with Rex’s entry. We are sure that both Qantas and Virgin Australia will immediately match our fares as they have done every time.

“We estimate that Rex’s entry will save Canberrans over $150 million a year in lower fares once travel returns to pre-COVID levels.  This is on top of an equivalent amount for the Sydney-Canberra route.”

ACT chief minister Andrew Barr welcomed “the major boost to competition” on one of Canberra’s busiest air routes.

“It will make it easier, and significantly cheaper, for people to visit Canberra,’’ he said. 

“It is a further vote of confidence in Canberra’s tourism and hospitality industry and today’s announcement will be welcomed by both leisure and business travelers,”

The $69 fare includes free checked baggage and on-board refreshments with three seating options: business, Rextra Legroom and Economy. 

Rex also offers a COVID Refund policy for new bookings, which guarantees full refunds for any passenger affected by COVID-related cancellations, re-scheduling, border closures and travel restrictions.