Rex offers $49 Sydney-Melbourne fares, business class at $199

The aggressive sale shows things are heating up in Rex's battle against Qantas and Virgin.

By David Flynn, February 10 2021
Rex offers $49 Sydney-Melbourne fares, business class at $199

With its first Sydney-Melbourne flights barely three weeks away, Regional Express is showing just how heated competition could get on Australia's most popular route.

The challenger has dropped its Sydney-Melbourne prices to $49 for one-way economy, or "less than a taxi fare" to the airport, with business class at just $199.

"Most taxi rides to the airport cost more than $49," recounted Rex Deputy Chairman John Sharp.

"This is a wonderful opportunity for travellers to get between Australia’s two biggest cities on a whim to get over the COVID blues."

These rates undercut Rex's initial and already-compelling fares which started at $79 for economy and $299 for business class.

The special fares are available for flights between Sydney and Melbourne in March, and must be booked by the end of February.

Sharp said the fares are refundable under the airline's policy "which guarantees full refunds for any flights affected by COVID, even if Rex's flights are not affected."

All Rex Boeing 737s are ex-Virgin Australia, and will retain Virgin's business class seats.
All Rex Boeing 737s are ex-Virgin Australia, and will retain Virgin's business class seats.

The $49 economy fares comes with all standard inclusions such as 7kg of carry-on bags and 23kg of checked luggage, along with refreshments on board.

At the time of writing, Qantas' Sydney-Melbourne economy fares in March typically begin at $159, with Jetstar at $131 and Virgin Australia at $79.

Update: Virgin has this afternoon matched Rex's prices, while Qantas has slashed its lead-in fare to $110 – read more here.

In the event of a price war, how low can Sydney-Melbourne fares go?

In July 2020, after Qantas chief Alan Joyce said that ultra-cheap airfares could help kick-start air travel following the initial pandemic shut-down, Jetstar launched a sale which included $19 fares from Sydney to Melbourne.

Armed with an initial fleet of five Boeing 737 jets – all of which were formerly leased to Virgin Australia, so they sport the same Virgin economy and business class seats – Rex plans nine return flights a day between Sydney and Melbourne from March 1, with Sydney-Brisbane being added to the nascent capital city network in early April.

Rex is aiming to double its Boeing 737 fleet to ten by the end of the year, and if things go well, have as many as 40 jets linking every capital city across Australia.

"By the end of 2022... Rex’s ambition is to be a sizeable domestic airline operator with a fleet of 30 or maybe 40, maybe even more narrow-bodied single-aisle aircraft operating on the domestic network around Australia," Sharp remarked in November 2020.

Also read: Can Rex win the business class battle against Qantas, Virgin?

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

QF

11 Jul 2014

Total posts 612

Alan Joyce said he expects his market share to be increased from 60% to 70%, this was a couple of months ago. Taking a punt I would say VA needs about 25% to 30% market share to break even in it's current form. Rex offering an equal standard to Qantas in meals and seats with a cheaper fare? Financial Review reporting that Bain has done what all Private Equity does, only care about the money, so will their loyal customers treat them like they have treated everyone else and move on? This is going to be one of the best case studies in 10 years time seeing who were the winners and who are the losers, and is the another Myers or Babcock and Brown?

30 Aug 2019

Total posts 16

Rex doesn't plan on offering an equal standard of meals to Qantas. It'll be more aligned with Virgin. 

Per their website:

Sit back and relax on Rex! All our fares include complimentary snack, water, and tea and coffee!

Purchase of soft drinks is available on all Rex services. Alcoholic beverages will be available for purchase on Rex services after 11 am (please note: a no-alcohol policy applies on the Gulf/Cape York routes).

Passengers in our business class cabin are served a specially crafted meal box, with an accompanying selection of soft drink, juice, red wine, white wine and beer included.

XWu
XWu

09 May 2020

Total posts 388

At least the booking website appears updated now which looks better than the “high school work-experience kid” feel that was the look from 2005.

But I seemed to have captcha verification every time I tried to look up the prices on different routes and schedule; might but just due to my ISP but if not this is a pretty bad way of trying to reduce Denial of Service bot attack since in many cases the slower the process the less booking from impulse purchase or completion of purchases 

And yes so far the $49 seat seemed to be available at time of writing 

20 Oct 2015

Total posts 159

The Rex website might be a bit better than the old one but it's still incredibly dated and old-tech, doesn't even reformat correct for mobile. I can't see how Rex can do such an utterly cap job at this website, surely these days it costs no more to do it properly than to do it badly!

Etihad - Etihad Guest

21 Jul 2019

Total posts 70

If you believe it and also if you're old enough to recall, Compass Airlines (Mk I from 1990) was subject to a 90's version of what we now call 'Denial of Service'. It was very low-tech 'old school' style. No websites back then. Just call centres and sales offices. 'Customers' would call to make bookings but then not pay for it, in suspiciously high volumes to flood and overwhelm Compass bookings. Nothing was ever proven but old man Grey (the smartest aviation man I ever knew) had his suspicions. Australian aviation is brutal, perhaps even cut-throat. If Rex sees the need to protect the integrity of their online booking service, then I say do it now!!

had an employee at time of Compass who worked evenings in Boundary St office of Compass, handling phone reservations. He said often they would answer a call & get a click & this sometimes was on every call waiting. Compass had a 1800 number, so someone obviously had set up a "few" phones that just continually dialed their 1800 at no cost to them, but jamming up reservations, so those who really wanted to book direct with airline, couldn't get through.

17 Jun 2020

Total posts 235

This is great to see. Airfares in Australia have been astronomical for quite some time (especially compared to Europe and USA). Yes I know you get a free meal or snack etc. but at most this only worth a few dollars. 

Not sure how this will all end, but hope competition remains well into the future (which is great news for the tourism industry). 

Now if only Regional Express can bring these fares to regional markets. 

kw72

doubt if many seats in peak hour at these prices, BUT if a thinking business type paying own fares, just fly in the middle of the day & stay the night at some reasonable hotel for 1/2 to 1/4 the price of Qantas return same day peak hour fare. Could even take the other 1/2.

20 Oct 2015

Total posts 159

As much as I like to see low airfares and high competition on routes, I really hope this doesn't ignite a 'race to the bottom' price war which Rex won't be able to afford, which would end up seeing it withdraw from the triangle and being a proper competitor to Qantas and Virgin.

gold4life, it didn't say every remaining seat in March is $49 & probably none in peak hour.  Rex are not fools & their costs are so much lower than insanely expensive Qantas, who aren't that special.

09 Aug 2015

Total posts 82

Qantas as an airline doesn't have much to fear from this because it can unleash low Jetstar fares in response, although this will hurt the bottom line of the Qantas Group. Virgin is probably the one who will get caught in this 'pincer movement' if it's not careful, with Rex and Jetstar stealing a lot of the bottom half of the market and Virgin still not able to challenge Qantas towards the top. That doesn't leave a big slice of the market for Virgin.

QF

11 Jul 2014

Total posts 612

@Sparksy 100% agree

Working out our travel policy this morning, Jetstar got a big "No" (Do Not Book) the cheaper flights aren't worth the inconvenience of being delayed or missing the trip altogether. From past experience asking people why they fly Virgin most would have a horror story about Jetstar and they would say Qantas don't fly there anymore and they put you on Jetstar.  Another point that came up was if the slots become late due to weather, Qantas gets in first, followed by Virgin followed by the others. You should always challenge the market leader for marketshare, chasing the low end is going to end in failure, 2 5th of nothing is nothing.

it's simply a promo fare & will make many look & say why are we paying $1000 to do a day return SYD/MEL or v.v. to sit in economy of qantas, who are not that special & not the national carrier, they pretend to be. Any airline with Australian flag on the side of aircraft can claim to be a national carrier.

Rex is NOT competing with Jetstar. Business types don't ever fly Jetstar unless they are really watching the dollars.

It will effect Qantas the most.

05 Mar 2015

Total posts 266

A lot of business people fly Jetstar due to the low fares. Most people who run their own business and are self-employed will watch their money carefully. For my own consultancy I can't always justify Qantas prices, if Jetstar has a much better fare on the day I can use that to save money, also if I am carry-on only too. Plus there are companies where staff fly QF but some contractors and short-term hires fly JQ. One of Australia's leading law firms has all staff fly QF but their 'expert witnesses' hired for each case will fly JQ. So JQ is not just a leisure airline.

Jetstar known by many as junkstar have a terrible reputation for mishandling delays & cancellations. eg. have seen late afternoon JQ flight cancelled & passengers told to come back tomorrow, while Qantas have plenty of seats on same route over 4 or 5 flights.

QF

11 Jul 2014

Total posts 612

@QFP1

Every business should be penny pinchers and watch the dollars going out, but on saying that when staff miss deadlines and this hits the bottom line "but we saved $200.00 on the fare".  If you have spare time and fly early for meeting and prepared to wait when thing go south Jetstar is a good option. If I'm flying into a city first up in the morning and back the same day I want reliability rather than the cheapest fare and the saving on the hotel room as well.

Lmc
Lmc

Qantas - Qantas Frequent Flyer

09 Nov 2018

Total posts 89

So $49 mel-syd and $899 melb to Mildura.... that makes sense 

again $49 is a promo fare only for bookings made in Feb & flying in March. Probably only 10% of seats.

QF

11 Jul 2014

Total posts 612

Most people don't realise REX have been given a discount on the leased 737 planes to get the business up and running. What happens to those $49.00 fares when their lease payment go up and warrior fliers haven't got a lot of good things to say about REX and those turboprops times. A lot of people are saying same company different plane.

uuaw

Rex have probably got very long term deals on their B738s.

They might still have same number of $49 seats in future, in middle of the day, but spread out over a much larger fleet.

Heard story of Air Pacific(now Fiji Air) apparently with 46% owned by qantas (Fiji govt has to own 50.1% am told) Air NZ, own something like 3 or 4%.

2 days after Sep 11, Ansett fell over. Ansett Int had 2 x b744s owned by Singapore Air. Air Pacific went to Singapore & said we want those 2 x B744s but can't pay very much at all. Next thing, Air Pacific had 2 x B744s on 10 year leases for a song. Story makes sense. Not sure if accurate.

As a result, Air Pac had more seats to LAX & eventually went daily direct SYD/LAX & quite a few seats were substantially less than any nonstop flight. Helps to compete when aircraft leasing costs are extremely low compared to competitors.

uuaw

seriously doubt that qantas leased B738s cost anything like how little Rex is paying (only for new leases of 2nd hand aircraft - does qantas have any 2nd hand B738s coming ) ?

but how much on SYD/MEL/Mildura flying Rex the whole way vs flying QF, VA, JQ SYD/MEL continuing on to Mildura with Rex.

Maybe $899 cos last few seats left on 34 seat Saab.

Can I presume that we will see a review of Rex Boeing 737 business class and economy from ET from the first flights?

24 Oct 2010

Total posts 2501

That's certainly the plan!

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 635

Hmm, just remembering back a number of years ago when a certain casino magnet and Sydney identity sat on the QF Board for a short time.

I wonder if said person might be considering a non-QF, alternative airline investment in the near future?  Airlines vs casinos .. much of a muchness in some eyes.

24 Aug 2011

Total posts 912

I doubt it.  Airlines are a great way for billionaires to become millionaires.

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 635

LOL ~ ah, the Warren Buffett quote. Often true .. but doesn't always work out like that. The likes of Frank Lorenzo and a number of other greenmailers made it work for them rather nicely. 

I'd better not comment further .. 

Joe
Joe

03 May 2013

Total posts 593

Here we go again......there will be winners and losers no doubt. Someone give me more popcorn.....

18 Jan 2017

Total posts 52

It is a concern that there first flights aren't even close to selling out?

The only sell-out seems to be the first flight from Melbourne - Sydney in Business Class.

I dont think this sell is painting a good picture on their loads.

A $48.99 fare = $18.69 going to Rex

A $199 fare = $155.06 going to Rex

many airlines have in past had $1 to $9 fare sales as cheaper than paying for advertising & everyone talks about it.


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