Regional Express (Rex) will take its fight against Qantas to Australia’s politically important Sydney-Canberra route as it next month starts serving the nation’s capital with seven Saab 340 turboprop services a day.
The airline will undercut Qantas with one-way fares starting at $99 and says it could increase frequency to 10 services a day if patronage is good.
It will operate a lounge at Canberra airport in conjunction with an existing lounge at Sydney Airport which it is in the process of replacing with a new, bigger lounge.
Qantas is currently the only operator on the route and a return economy fare on the short flight can cost an eye-watering $1200.
The bigger airline says demand has been subdued in the past year, although it is starting to pick up, and it is operating at 40 percent of pre-COVID capacity, or 50 flights per week, using a mix of Boeing 737 and 717 jets as well as Q400 turboprops.
It also notes fares on the route have remained stable and $193 one-way tickets are still available on Rex’s April 19 start date.
A search of the Qantas website for flights on March 30 returned one-way economy Sydney-Canberra fares ranging from $219 (Red e-Deal) to $423 (flexible) for a direct flight. The cost of tickets on return flights the same day ranged from $193 to $600.
However, fares increase for people wanting to book at the last minute, particularly in parliamentary sitting weeks when demand is higher.
At the time of writing, only $600 flexible Sydney-Canberra fares were available for people wanting a next-day economy flight during the day on March 25, with prices easing to between $284 and $423 by evening. People wanting to return that day also faced a $600 ticket except for the last two flights, where $423 flexible tickets were available.
While the Rex lead-in fare is cheaper, the newcomer will have to contend with the lure for corporate and government travelers of the powerful Qantas frequent flyer program as well as the flying kangaroo’s bigger aircraft and superior lounge offering.
Nonetheless, Rex management believes the airline’s affordable fares will stimulate more business and leisure traffic between Sydney and Canberra.
“Rex has a war chest of $150 million funded by private equity for domestic services and we will not be deterred in our goal of bringing safe reliable air services at affordable fares to all major cities in Australia,’’ Rex deputy chairman John Sharp said.
“We believe that on the Sydney – Canberra route alone Rex will be bringing annual savings of between $60 – $100 million to commuters when numbers return to pre-COVID levels, such is the level of fare gouging being practiced.”
Canberra Airport chief executive Stephen Byron welcomed the airline’s investment in “a growing and expanding region”.
“This new Canberra – Sydney route will offer more choice for our travelers, stimulate jobs and grow the air travel market which is a win-win for us all,” he said.
Rex is muscling up with Boeing 737-800NG aircraft to take on Qantas and Virgin on major trunk routes.
It currently has four aircraft in Australia, with more on the way, and is already operating on the nation’s biggest route between Sydney and Melbourne.
It plans to expand its B737 footprint with Melbourne-Gold Coast flights from March 29, Melbourne-Adelaide services from March 31 and Sydney-Gold Coast flights from April 1.
The largely regional airline has a fleet of 60 Saab 340s and operates to 62 destinations throughout Australia.
A Qantas spokesman said that, unlike Rex, the airline welcomed competition on the routes it flew.
It said its lead-in fares had not changed since Virgin pulled off the route and sale fares had recently been as low as $109.
“Just as we have done for decades, we will continue to provide high-quality and reliable service with regular flights available throughout the day between Sydney and Canberra for government, corporate and leisure travelers,” the spokesman said.