Rex’s plea to West Australians over new Perth flights amid hopes of an airfare war with Qantas, Virgin

Relief could finally be on hand for WA travellers labouring under some of the world’s most expensive air fares. An aviation upstart with roots in east coast bush airlines, Rex Airlines on Friday will launch its first direct flights between Melbourne and Perth and is urging West Australians to get behind its expanding network. “If the people of WA want competition . . . all they have to do is support it,” Rex chair John Sharp said. The Sydney-based carrier has already launched the first salvo in what could develop into a price war with Virgin Australia and Qantas and its Jetstar subsidiary on the busy Melbourne-Perth route by offering a limited number of $99 one-way fares during a 48-hour sale last week. The sale offer is said to be lowest Melbourne-return fare for nearly 15 years. Even Rex’s standard fare of $299 on the route is the cheapest since 2015. As of Thursday, for economy travellers flying out of Perth at 11.55pm on July 5 and returning at 10.40pm a week later, Rex was offering return fares to Melbourne for just $418, including the $99 introductory offer on one leg of the trip. The price included 23kg of checked luggage, an in-flight snack, water and tea and coffee. By comparison, Virgin’s best return fare was $577.99 but included only 7kg of carry-on luggage. Similarly, Jetstar’s best offering did not include checked bags and came with a 1.45am departure from Perth at a price of $593. Qantas’ best fare was $796, with an 11.30pm departure. New analysis by the Australian Airports Association shows Qantas and Virgin have already lowered prices to compete with the new entrant, noting the average cheapest airfare between Melbourne and Perth for the month after Rex’s start had fallen more than $200 to $340. The carrier’s new interstate routes from Perth will also potentially shake up the corporate travel market, offering $999 one-way business class fares to Melbourne. The cost of flying to the Victorian capital has long been a source of contention for travel-hungry West Australians — particularly sports fans — with frequent accusations of price-gouging levelled against Qantas and Virgin. The route is one of the world’s biggest aviation earners. Global aviation consultancy OAG last year ranked Melbourne-Perth 10th in the world’s top routes by revenue, saying it pulled in nearly $1 billion ($US642.5 million) in the first half of 2023 alone. That was up 209 per cent on the same half-year in 2019. While noting that the long distance between Melbourne and Perth was a factor in the “consistently high airfares” since COVID-19, AAA’s head of policy and advocacy, Natalie Heazlewood, said Qantas and Virgin had made the route “profitable but not necessarily competitive”. Her analysis for the June to July period shows that Virgin, which, she said, normally competed with Jetstar on price, was instead now selectively cutting prices in response to Rex’s arrival. “On peak travel days during the WA/VIC school holidays which drive travel demand, Virgin Australia increase their fares to ‘market’ level to maximise profits,” Ms Heazlewood said. “On the days Rex is not servicing the route (particularly Saturdays), Virgin Australia increases airfares to ‘market’ rates again for six out of nine (of) Rex’s non-direct flight service days.” Rex announced the new service last month, saying a new 176-seat Boeing 737 would fly the route five days a week. It has since added a three-day-a-week Perth-Adelaide service - fares start from $249 - using Embraer E190 jets used by its National Jet Express subsidiary. All up, the new services will bring 120,000 seats into Perth. Mr Sharp said bookings had “exploded” since the 48-hour sale and Rex was hoping sustained demand would be strong enough to support additional daily services to provide customers with more options. “If people want competition between the west coast and the east coast, then support us, because we are ready to provide additional frequencies, and at these prices, its very hard to look elsewhere,” he said. “I’m biased, but I think we are really good value for money, we are (Australian Aviation Magazine’s) airline of the year for the past two years, we have been around for a long time and we have an incredible track record that demonstrates to people that they can fly with us with confidence.” Rex was formed out of two former bush airlines, Hazelton and Kendall, which were plucked from the wreckage of Ansett after it collapsed in September 2001. Backed by a Singapore-led consortium of investors, Regional Express listed on the Australian stock market in 2005, gaining access to more funds to fund expansion. At the time, it was carrying about one million passengers on 50,000 flights a year on 35 mainly regional routes out of Melbourne, Sydney and Adelaide. It now services nearly 60 destinations, including WA regional centres such as Albany and Esperance, with a fleet of Saab 340 turbo-prop and Boeing 737-800NG jet aircraft, and passenger numbers are running at nearly three million a year. It hasn’t all been smooth flying. The group last year suspended a range of regional services, some of them struggling to make money, blaming pilot shortages and “anti-competitive behaviour” by Qantas, which it accused of flooding “marginal” routes just to undermine Rex. The group has long focused on its consistently superior “on-time” record and low flight cancellation rate to help differentiate itself to customers, particularly since Qantas’ bungled return from the pandemic battered its reputation for service and performance among Australian travellers. Rex recorded an average on-time departure and arrival rate of 82 per cent in April, pipping Virgin’s 81.6 per cent and Qantas’ 78.6 per cent. Mr Sharp used the out-performance to promote the Melbourne-Perth service, noting “our competitors cancelled 57 flights in total on this route in the first four months of 2024, while their combined on-time arrival and departure performance was only around 72 per cent”. Online reviews of Rex are generally favourable, with the on-time performance a big factor in customer approval. Travel agency Flight Centre said businesses would welcome the competition on the routes to Melbourne and Adelaide, citing a 68 per cent increase in the number of corporate travellers opting for Rex in the financial year to date. The general manager of Flight Centre’s Australasian FCM Travel business, Renos Rologas, said companies were always looking for cheaper options when it came to booking travel for staff. “With the cost of doing business at an all time high, businesses are keeping an eye on every expense,” Mr Rologas said. “We know that travel is non-discretionary, and therefore our travellers, and our travel experts, are focused on keeping corporates moving across the country, without adding unnecessary financial strain. “Welcoming an additional carrier to these routes is very positive for businesses, giving them more variety and competitive pricing. “The added competition and capacity will improve the cost of airfares, and Rex is clearly a popular option for travellers, so it’s fantastic to see the airline continue to expand its services.”