Rex ready to battle Qantas, Virgin on Sydney-Melbourne-Brisbane

Delivery of the regional airline's first Boeing 737 jet marks the start of a bold assault on Australia's busiest route.

By David Flynn, November 4 2020
Rex ready to battle Qantas, Virgin on Sydney-Melbourne-Brisbane
Executive Traveller exclusive

Regional Express says it will be flying six Boeing 737 jets between Sydney, Melbourne and Brisbane by April 2021, following the launch of Sydney-Melbourne services on March 1, 2021.

It’s a brazenly ambitious assault on Australia’s hyper-competitive corridor – the industry’s crown jewel for corporate and leisure travel – which will pit Rex against muscle-bound incumbent Qantas and a streamlined Virgin Australia.

[An earlier version of this article alluded only to Sydney-Melbourne flights; Rex has since confirmed that Brisbane flights will launch in early April]

The first of six Boeing 737s – all previously leased to Virgin Australia – has already arrived at Rex’s Sydney base, where it will be used for ground training as well as venturing into the sky for proving flights (still in a de-branded white livery) in early December.

The first Rex Boeing 737 touches down at Sydney Airport.
The first Rex Boeing 737 touches down at Sydney Airport.

At least three jets – one of them said to the airline’s nominal flagship, bearing the registration VH-REX, which is currently assigned to a Saab 340B – will take part in the March 1 launch of Sydney-Melbourne flights, with three more slated to be in place by early April.

Those six Boeing 737s all date from the Virgin Blue era and carry an average age of 11.5 years, predating the release of the later Virgin Australia aircraft featuring the modern 'Boeing Sky Interior'.

'Virgin not in our cross-hairs'

Executive Traveller understands these ex-Virgin jets will largely be flown by ex-Virgin pilots, backed by ex-Virgin attendants and ex-Virgin engineers.

Even Rex’s internal Project Mother codename for its capital city push was a nod to the Brisbane-based challenger, because “Mother is the opposite of Virgin” chuckles Rex deputy chairman John Sharp.

All the same, Sharp insists that Rex doesn’t have specifically Virgin Australia in its cross-hairs.

“I don't think anybody’s in our cross-hairs, and I don't like to portray ourselves as taking on Qantas, Jetstar, Virgin or Uncle Tom Cobley,” he tells Executive Traveller.

“All we see ourselves as doing is adding to the choice that travellers will have… we don't want to be seen to be taking on anybody.”

Rex deputy chairman John Sharp: capital city flights are about increasing choice for the traveller.
Rex deputy chairman John Sharp: capital city flights are about increasing choice for the traveller.

But isn’t Rex taking on all players, and by necessity seeking to carve out its own slice of their market share?

“Well, that's true,” Sharp admits, “we will need to get some market share… but the thing to focus on is not so much market share, but profitability and sustainability.”

In common with outgoing Virgin Australia CEO Paul Scurrah and Virgin’s new owners Bain Capital, Sharp refuses to worship at the altar of market share.

“You want to be able to operate the business in a way that enables it to survive – whatever market share we get that achieves that outcome is secondary.”

Building the customer base

A baseline of that market share will come from Rex’ existing customers who fly between regional centres and the capital cities.

“We think there's a fairly large portion of our regional travellers connecting onto other flights,” Sharp explains.

“Let’s say you're flying from Dubbo to Melbourne. You fly the first sector with Rex to Sydney, and then you get onto a flight to Melbourne.”

Today, that inter-city leg is made with a competing airline – from March 2021, Sharp expects passengers will complete their journey with Rex.

Rex expects its regional passengers flying between capital cities will show loyalty to the airline.
Rex expects its regional passengers flying between capital cities will show loyalty to the airline.

“We’re not certain as to the exact number because we don't book those connecting flights, but as as a ballpark figure we estimate somewhere between 30-40% are connecting onto other services, and obviously we would want to capture all of those passengers.”

“That gives us a good start, and obviously we're going to need more than them, and hence more leisure travellers,‘best fare of the day’ government travel and so on.”

Competitive pricing

Sharp also hopes that small businesses will be among the first to sample Rex “because we are generally very competitive in our price.”

The people who run small businesses “are usually they're the ones doing the travelling (so) they’re more conscious of price,” compared to “corporates where the people doing the travelling are not paying, so they’re less price-conscious.”

So how low can Rex’s fares go, in order to attract all those travellers?

“We think we'll be very competitive against Jetstar, and we’ll be competitive against Qantas against Virgin. Of those airlines, Rex has probably about the lowest cost base so are probably in a position to offer very competitive prices.”

Sharp even expects an early degree of ‘sampling’ by curious travellers, “people who will want to try something new and different.”

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.

XWu
XWu

09 May 2020

Total posts 285

Not exactly related to this particular news but just also pointing out the news item on ABC news website profiling on certain regional (western QLD) airports currently having airport security checks will no longer be required to do so “ under new Federal Government rules to be rolled out across the nation by Christmas“

It is unclear if this new rules were in fact the one enacted in late 2019, or if there are further changes made without requiring further amendment of actual wording of the aviation transport security bill by redefining the assessment criteria of risk when allocating the airport to the tiers which determines the level of security required

Although this may not mean that REx will sought to start direct routes between these airport to BNE (and risk their current QLD sponsored outback mail-run-like network), it should by right mean lower airport fees (and lower fares if QF choose to pass on those savings) but may still indirectly affect pax numbers of QLD govt sponsored REx network.

The other lead-in issue is whether any airport in other states will see themselves downgraded in their requirements of airport security, whatever “new rules” are involved 

XWu
XWu

09 May 2020

Total posts 285

Oh BTW Sharp’s claims to focus on their current regional clients actually makes sense to be and is what I expected.

Get the regional clients more to use more REx metal and then price the tickets so the the leisure pax travelling inter capital cities fill up the seats so that the flights are viable. After 12-24 months when enough leisure pax are used to REx products they can dial up the pricing slowly to make a profit.

QF

11 Jul 2014

Total posts 536

The interested point here is Qantas believe there market share is going to increase from 60% to 70%, "there dreaming", on saying that I don't believe all airlines will survive long term.

Qantas - Qantas Frequent Flyer

30 Aug 2016

Total posts 9

Feel like REX would be better off flying routes that Virgin/Qantas don't, there are plenty of gaps in the market in Australia. 

Such as Jetstar only flying ADL-HBA and vv, no other airline does this flight and its a late at night flight and only twice a week, if REX did this as a day flight it would be very successful. 

Also no direct flights ADL-LST, but plenty of demand with most people going via MEL or SYD, a direct flight would be very popular. 

ADL-MCY again only Jetstar on this route but very popular and only 3 flights a week. 

This is just ex ADL but plenty of routes that would be good money makers for REX ex MEL, SYD and BNE. 

There is no money to be made by competing with Virgin and Qantas on MEL-SYD. 

Qantas - Qantas Frequent Flyer

09 May 2011

Total posts 356

If the route was popular or the demand was there, Jetstar would do it. The fact they only service the route several times a week shows there isn't enough demand. They are very quick to jump on demand

Qantas

19 Apr 2012

Total posts 1141

Akl Rex could do those routes with a Saab just like there is a Canberra Hobart direct. With smaller planes they are viable.

P
P

17 Jan 2018

Total posts 86

Yeah my Saab 93 is a pleasure to drive. Luxurious and socially distanced. 

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 370

Ha!  Yes, I use a 900 Turbo S for low level ultra high speed sorties when the enemy can't track & trace.  But for J-Class on 4 wheels, I travel prefer the 9000 Aero with its wood panelling (dash facia, console and door sills), onboard Jason recliner seats (not quite flat beds), overhead reading lamps and cruise control (the highway cruiser of choice by the Aspen policer department on late 1990s).  

Qantas

19 Apr 2012

Total posts 1141

By the way who is MCY can we avoid acronyms please.

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 370

Maroochydore

Qantas

19 Apr 2012

Total posts 1141

Boeing if you are communicating with yourself then MCY is fine, to anybody else spelling out is more than worth it.

Qantas

19 Apr 2012

Total posts 1141

oops I meant abbreviations

QF

11 Jul 2014

Total posts 536

I agree people should stop using abbreviations for example "J Class" what does that mean?

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 259

The question is whether which one of REX or Virgin will survive in the longer term.  QF group overall only has to sit back and watch those two go at it.

qantas has one massive price disadvantage in a recession which will now probably last 2 to 3 years, due to insane border closures.

SYD/MEL is the most profitable route & was 2nd busiest in the world.

Once Rex has 6 jets, they can have very good frequency such as ex SYD & MEL departures Mon-Fri

0555(0600 actual take off from SYD)

0625

0650

then 1st aircraft from other city can depart at 0800 if necessary, but most business flyer want to be in other city by 0900 ish, so 0700 is really the latest departure time for peak hour.

Similarly in the afternoon rush hour

1645

1730

1815

Often have had to travel last minute & SYD/MEL/SYD fares can be more than SYD/LAX/SYD (booked in advance), so there's a lot of room for Rex to play around with fares.

A very very simple initial sales idea, would be to "give away" 1 nonstop peak hour flight, for every peak hour flight purchased.

05 May 2012

Total posts 30

...for the advertising campaign, will we see the "sick'em Rex" slogan borrowed from Antz Pants 1989 tvc.🤔

probably no reason why rex couldn't use term sick em rex in ads.

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 370

Me thinks there's just a tad too much hubris inside Rex, and its based upon the suffering at Qantas and Virgin which Rex thinks it avoided because of smarts rather than luck.  It'll be their undoing, unless they're able to dump the 737's without too much pain.    

19 Jun 2020

Total posts 22

Having flown Rex regionally on and off for years (due to no other choice) , they would need to pick up their game a lot to get me.

Although if Virgin don't actually tell its ff's how they are going to operate soon, Rex and Qantas may pick up some extra customers out of sheer frustration. Considering that the new CEO is on deck and the biggest route (Syd/Melbourne) is about to re commence, now would be a good time to lay out their offer to potential customers. It would be hard to believe that work hasn't already been done. Unless of course if it is a rubbish offer.

Qantas - Qantas Frequent Flyer

19 Jun 2019

Total posts 6

REX flies primarily in NSW and QLD, they’ll connect regions well with a SYDMELBNE triangle, they may add ADL too later but I can’t see them flying to WA or TAS for a while if at all, get the triangle working and then see about adding later

08 Feb 2018

Total posts 105

Go REX. 

qantas's arrogance will see them lose out. I would never ever pay to fly qantas.

Qantas - Qantas Frequent Flyer

25 Sep 2013

Total posts 1243

Good luck.

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 322

i only fly qantas as a last resort these days.virgin is my carrier of choice.if i have to go regionally in south australia and don't wish to drive qantas link it is(my little car is fun and all but the thought of say 7-8 hours with fuel stops to port lincoln when i can fly that in less than a hour puts me onto a plane)

QF

11 Jul 2014

Total posts 536

People are worried about flying on the 737 MAX, has everyone forgotten that REX lost a propeller and they were investigated for maintenance issues. For that reason, I currently put them as my last choice as a passenger, it's like being in Panama and you can still see the TAA markings on the Fokker Friendship. I've never heard a bad word on Alliance Airlines so even they are a head as a preference.

Qantas wrote off a B747-400 at Bangkok in Sept 1999, although with some creative accounting/dodgy deal with insurance company, it was said it wasn't written off.

(possibly aircraft value changed to suit insurance claim)

Still there was a ~$100m or so repair bill. Love to know how they got it to China to repair.

QF

11 Jul 2014

Total posts 536

This is correct and the reason for spending so much money was to keep the slate clean on Qantas's safety record. No one would ever argue Qantas pilots are trained to the highest standard.

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 370

Perhaps now REX will be held to the same safety standard as Qantas and Virgin.  Guess we'll soon find out.

08 Feb 2018

Total posts 105

qantas also lost 2 engines on an A380, and didnt an oxygen cylinder punch a hole through a 747 door departing HKG

actually think very few worried about 737 max. Yet another media beat up.

90% of flyers would not know one version of a 737 from another & big % of them, wouldn't even know if they were on an A318/19/20/21 instead.

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 189

dm12

Qantas actually only lost 1 engine on the A380 incident.  Number 2 engine virtually flew apart and did slightly damage the # 1 engine but it and the other 2 were still operative so they did have 3 operating engines. The exploding Oxygen bottle almost caused a catastrophe but luckily did not cut through vital flight control and fuel systems. They were very lucky indeed.

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 189

Boeing-Tragic

Rex , Virgin and Qantas all have very high world standards of pilot training.

To say that Rex will now have to be held to the same standard of the other two is wrong as they are all well trained right now.

Without saying too much suffice it to say that my numerous years in aviation give me some credibility to make such a statement.

Boeing t

of course, most if not all rex B738 pilots will be ex qantas or virgin.

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 189

Patrickk

Whether it's acronyms or abbreviations you were referring to it does not change the fact that this is an Aviation based forum and the use of IATA codes is very correct and relevant and very common.

Grab yourself a copy of the IATA codes and have them handy it will make it easier for you to understand these codes which most people use in all forums aviation related.

Qantas

19 Apr 2012

Total posts 1141

Rod as David has pointed out before it is a business travel forum rather than an aviation forum per se, and most business travelers I know aren’t au fait with airport codes beyond the ones on their most used boarding passes. As one who writes as part of their day job I’m well used to editors and copy-editors picking me up for uncommon abbreviations or acronyms, so apologies for returning the advice. For me and I suspect to most business travelers many of airport codes cited are not commonly used by them, I suspect they feel thy don’t need a copy of the codes. Maybe have an exam on the codes before flying would encourage them to learn them.

24 Oct 2010

Total posts 2435

Hi RodH – actually, Executive Traveller (as was Australian Business Traveller before it) is a website for business travellers and frequent flyers, rather than an "aviation forum".

As such, it means we are writing for a more mainstream audience, and in keeping with that we lean towards more mainstream language – which is why you'll see our articles use the names of airports and indeed airlines rather than their abbreviations.

This also extends to our use of single-aisle instead of narrow-body for the likes of the Airbus A320, Boeing 737 etc: the average person can visualise and relate to a single aisle in an aircraft, whereas a 'narrow-body' means nothing to them.

That's all part of making Executive Traveller very accessible to just about anybody, and that's something we hear time and again from our readers.

Qantas - Qantas Frequent Flyer

09 Jun 2011

Total posts 92

For what it’s worth, “Rex” is an abbreviation...

Qantas

19 Apr 2012

Total posts 1141

Flychris exactly and the first two words of the article are ‘Regional Express’ after which it is abbreviated.

24 Oct 2010

Total posts 2435

Regional Express calls itself Rex, check out the airline's website. For 'airline abbreviation' I'm speaking more of IATA codes, such as writing ZL instead of Rex or Regional Express. The only time we'd use ZL is as a flight number, such as once Rex's capital city schedule is published.

makes you wonder, with the extra competition, will domestic airlines now be looking for charter work at realistic prices, ie. maybe Sat pm or Sun am when usually quiet.

A large hotel somewhere, might want to fill rooms, so charters might be way to go.

22 Oct 2020

Total posts 3

737s from the Virgin Blue era....basically scrap heap. Here’s hoping there OTP isn’t scuttled.

story says average age 11.5 years, which is not old. Think many of the Qantas 737s are circa 2001 or older. Correct me if I'm wrong.

Some of Alliances Fokker jets are apparently approaching 40 years of age & Alliance is one of the very few airlines around the world making money at present.

correction - approaching 30 years not 40 years old

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 189

Patrickk

You are correct it's not an aviation forum per se but nearly all articles / forum posts/ topics  are aviation related travelling experiences.

If you have a good read of previous post on many topics/ articles in this forum then you may see a lot of references to IATA codes and whilst not required they are often used and it's not really hard to find out what they mean. Google is rather good at that!

My main point is that you have asked forum members not to use these IATA codes / acronyms / abbreviations in this discussion.

Surely the responders  have every right to use IATA codes if he/she wishes to.

When you reply then by all means use full descriptions of airports should you desire to but we also have the right to use IATA codes.

It's not very hard to simply read the article and research terminology  you don't understand rather than ask others not to post terminology  you don't like.

Qantas

19 Apr 2012

Total posts 1141

Rob if only I could use your  ‘right to use’ with my editors and sub-editors, life would be so much easier!!!! And as I said apologies for asking to spell this stuff out but I may still continue to ask.

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 189

Patrickk

The beauty of a forum is that everyone who is a member can contribute and ask any question they wish to and post their opinions , within reason , in any manner they would like to. We have moderators that  edit Reponses that are inappropriate and I must say I have seen very few moderator imposed editing in this forum which shows how well contributors are submitting things.

I feel sorry for you not to be able to use " right to use "  as dictated by your editors but I guess they have to lay it out to satisfy the majority of their readers so they can't  be as free to  allow expressions of  words as I can or you would like to.

Good to see a nice healthy civil debate like we are having, and you are correct in that you should continue to ask.

It's the best way to find out and I enjoy reading your posts!!


Hi Guest, join in the discussion on Rex ready to battle Qantas, Virgin on Sydney-Melbourne-Brisbane