Australian Saab 340 operator Regional Express (Rex) has called on the federal government to halt Covid-19 relief payments to Qantas due to what Rex characterizes as anti-competitive behavior by the flag carrier. Rex on Tuesday received a High Capacity Air Operator’s Certificate (HCAOC) from Australia’s Civil Aviation Safety Authority (CASA), allowing it to launch Boeing 737 service starting in March. According to Rex, Qantas has begun flooding markets in an effort to weaken the regional airline ahead of its foray into narrowbody operations.
Rex points to Qantas’ launch of a route between Sydney and Orange, New South Wales, a market that saw pre-Covid traffic of some 65,000 passengers. According to Rex, Qantas managed to average about 10 passengers per flight on its two round trips per week since it launched service on the route on July 20.
“History has shown that once regional airlines are squeezed out, the loss is permanent and regional and rural communities suffer the consequences,” said Rex in a statement. “Qantas is choosing to incur huge losses on these routes, using Commonwealth government subsidies to finance a strategy that will destroy incumbent regional operators.”
Rex said it alerted the Australian Competition and Consumer Commission (ACCC) of its charges.
“We now call on the federal government to issue a second direction to the ACCC to provide it with more specific powers that will protect new entry and expansion, and that will bring greater competition to the domestic market at a time when the aviation industry is particularly vulnerable to aggressive behavior that entrenches the market power of the dominant carrier,” added Rex.
Rex plans to start flying a Boeing 737-800NG between Sydney and Melbourne on March 2021 with A$79 fares for the first 100,000 tickets sold. The airline has signed a lease deal on the six of the narrowbodies and plans to add four more by the end of next year.