Rex blasts Qantas assistance

REGIONAL Express (Rex) has urged the suspension of all government aid for Qantas, after calling out what it describes as QF’s “anti-competitive and predatory behaviour”.

Rex particularly highlights the new Qantas route between Sydney and the NSW regional city of Orange (TD 01 Jul), saying the launch of the operation demonstrates that QF “has spare funds to incur additional losses simply to weaken its competitor at this time of national crisis”.

Currently Rex’s two weekly flights to Orange average just 20 passengers each, with a load factor of around 30%.

“Qantas intends to flood this market with another 216 seats a week, making it an aggregate load factor of 11% for the two carriers,” Rex said.

“Even if passenger numbers return to pre-COVID levels in the next 12-18 months, Qantas’ entry would see a minimum of an additional 60,000 seats on this market, making the overall load factor for both carriers to be only 41%...this is clearly commercially unsustainable,” the airline added.

By contrast, even on some routes where Commonwealth funding is available, such as Sydney-Toowoomba, QantasLink is not even recommencing flights.

QF’s new Orange route does not qualify for government support.

“It is obvious that Qantas’ action is not competition on its merits, but rather predatory behaviour aimed at weakening Rex at a time when all airlines, including Qantas, are sustaining operational losses, hoping that if Rex collapses it will have the regional aviation market to itself.

“Given that Qantas has enough money to engage in non commercially-viable ventures, it clearly shows that Qantas does not need any financial assistance,” the regional carrier fulminated, urging the ACCC to use its new powers (TD 19 Jun) to intervene.