REX accuses Qantas Group of capacity dumping

185
April 15, 2021
Rex

Qantas is sending in “all the cavalry” to attack REX claims its deputy chairman John Sharp.

“It reminds me of the bitter war between Qantas CEO Alan Joyce and then Virgin Australia boss John Borghetti that led to the biggest loss in Qantas’s history and the beginning of the end of Virgin.”

“At the time Alan Joyce said that for every aircraft that Virgin Australia put in the sky he would put in two,” Mr. Sharp said.

“Today’s announcement of the deployment of 335-seat 787s and 180-seat A320s from Jetstar Japan [onto domestic routes] has all the hallmarks of capacity dumping.”

“And what an incredible coincidence that Virgin Australia announces 10 new aircraft and huge expansion on the same day and the same time.”

Virgin Australia made its announcement at 8.30 am Sydney time with Qantas’ ASX announcement following shortly afterwards at 8.38 am.

The Jetstar deployment was part of a wider Qantas Group announcement of increased capacity across the domestic and New Zealand network to meet demand stimulated by government fare subsidies, the opening of state borders, and the Trans-Tasman bubble.

Jetstar also announced discount fares undercutting Rex’s standard lead-in fares on key routes such as Sydney and Melbourne to the Gold Coast by $11 and $6 respectively.

But expansion is still on REX’s radar says Mr. Sharp.

“Our intention is to connect all the capital cities as the market recovers and our loadings are good.”

“Some flights are full while others not so but overall loadings are better than I would have expected at this time,” Mr. Sharp said.

The airline is also expanding its footprint significantly into key regional centers.

However, the ACCC, Australia’s consumer and competition watchdog said its “assessment is that airlines are adding additional capacity on a number of domestic leisure routes in response to increases in consumer demand, including due to international travel restrictions and because of the Government’s Tourism Aviation Network Support (TANS) package.”

A spokesman added that “the ACCC continues to monitor competition in the domestic aviation market and, in particular, as the industry stabilizes, we are watching for conduct that may raise competition concerns.”