Independent analysts have backed Qantas in a dispute over alleged “illegal predatory behavior” with regional airline Rex.
Rex withdrew two routes after accusing Qantas of “dumping” tens of thousands of extra seats on regional routes to force the smaller airline out of the market.
But Qantas has denied the allegations and has been backed by independent analysts and consumer watchdog ACCC.
Last week, Rex announced it would discontinue flights between Melbourne and Albury. On Tuesday, it announced it would also drop the Sydney-Canberra route, which it said had become unfeasible “after the arrival of an additional operator”.
The new airline on that route was Virgin Australia.
Rex deputy chairman and former National Party Transport Minister John Sharp said Qantas was waging “a war of attrition”.
“Rex has no choice but to fend for himself,” he said after Rex left the Melbourne-Albury route.
But aviation adviser Neil Hansford, president of Strategic Aviation Solutions, said Qantas offered a better product with greater economies of scale.
Rex operates smaller and older aircraft than Qantas on regional routes. Photo: Getty
“Rex has always gone on the mandate of whining,” he told news gear.
‘Nagging is the first part of their hymn book. It’s always everyone’s problem.”
Mr. Hansford said Qantas has introduced new regional routes to direct passengers to the busier jet routes across the country.
“Qantas has a much more modern, reliable aircraft first and foremost,” Hansford said.
“Second, the Qantas frequent flyer program is a huge improvement. Third, Qantas’ regional services connect seamlessly with their international and interstate services.”
Rex recently tried to compete on this third point by striking a deal with Delta Air Lines in the US.
Qantas strikes back
Qantas has taken a similar line of defense after Mr. Sharp accused the company of dumping tens of thousands of extra seats at regional seats.
A spokesperson pointed out that while Qantas is adding 31,200 new seats a year on the Melbourne-Albury route, Rex currently has 44,928 seats on the same way, even more than its pre-COVID-19 figure.
“Rex’s default approach when it pulls out of any route is to blame Qantas,” the spokesperson said in a statement to TND.
“Rex’s idea of competition is that it happens to others because they believe they have an entrenched right to be the sole carrier on some regional routes.”
The three players: are Qantas CEO Alan Joyce, Virgin Australia CEO John Borghetti, and Rex Vice-Chairman John Sharp. Photo: AAP
It is not the first time a fight has arisen between the airlines.
Things started earlier in the pandemic when Qantas took on new regional routes where Rex had a monopoly, and Rex launched its jet service between East Coast capitals.
In 2021, Qantas even set up a special webpage to refute Mr. Sharp’s claims.
Mr. Hansford also noted: “If it were so, [Mr. Sharp] describes, illegal and predatory, he would already be in court and have the ACCC all over it. †
The ACCC supported Qantas on this point last year.
In March 2021, then-ACCC chairman Rod Sims told a Senate investigation that it was “a bit difficult” to call Qantas’ move predatory, as he understood the airline was “generally positive about cash on those routes”.
An aging fleet
Hansford, who has more than 40 years of experience advising airlines, said Rex has a “geriatric” fleet of aircraft that cannot compete with Qantas.
Rex is leasing six Boeing 737 jets for its new routes between capitals.
But the backbone of the regional network is a fleet of 67 Saab 340s.
The small turboprop aircraft can seat 33 to 36 passengers and go out of production in 1999.
On the other hand, Qantas operates a Dash-8 on the Melbourne-Albury route that can accommodate up to 74 passengers.
“By now having a larger aircraft on board, you still have the same number of pilots, you still use the same fuel, but you may be carrying another 30 passengers,” Mr. Hansford said.
He believes Rex will not be competitive unless it upgrades its fleet with larger, more modern aircraft.
The regional airline did not answer a question about its future fleet plans.