Australia’s Rex gears up for trunk route competition
Rex – Regional Express (ZL, Wagga Wagga) plans to gear up to thirty B737-800s over the next five to seven years as it prepares to take on Qantas, Jetstar Airways, and Virgin Australia on Australian trunk routes.
This was revealed by chairman Lim Kim Hai recently during a panel discussion at the Singapore Airshow. He said a “meaningful size” for its narrowbody jet operations would be between 20 and 30 aircraft. The airline aimed to deploy between six and ten aircraft a year. “That’s a very good medium-term objective,” Lim said. “There’s a lot to be said for economies of scale.”
The disclosure more than doubles previously announced expansion plans from the current six B737-800s to 14 jets. Its current narrowbody fleet is leased from Virgin Australia, Castlelake, and Banc of America Leasing Ireland respectively, the ch-aviation fleets advanced module shows.
It also comes as Rex prepares to launch B737-800 operations on March 1 on domestic trunk routes between capital cities in competition with Qantas, its low-cost subsidiary Jetstar, and Virgin Australia. Previously focused on regional routes, Rex started operating B737s in March 2021 between Melbourne Tullamarine, Sydney Kingsford Smith and Canberra, and Adelaide and Coolangatta/Gold Coast.
However, in July 2021, Rex was forced to suspend all B737 routes due to interstate closures due to rising COVID-19 cases. At the time, it also deferred the delivery to mid-2022 of four B737-800s it had planned to add by the end of 2021.
According to Bloomberg, Lim believed the worst fallout from the pandemic to be over. “I’m just starting to see in the last six or seven days a turnaround,” he said. “Significant enough for me to believe that probably the bottom has been reached. It gives us some encouragement. You just hope that you ride out the bleed and be there when you recover,” he said.
He acknowledged that the 2021 and 2022 operating environment has “not been easy” amid travel restrictions, an Omicron surge, and staff shortages. “No airline makes money when planes are half-full,” he was quoted by Australian Aviation.
Rex made its mark serving regional domestic routes with a fleet of Saab turboprops. Its fleet comprises one S340A, thirty S340Bs, and twenty-six S340B(Plus)s, according to the ch-aviation fleets advanced module.
Its foray onto trunk routes has followed its long-standing stand-off with Qantas for allegedly trying to push it out of its previously exclusive regional routes. With its international fleet grounded due to border closures during the pandemic, Qantas added 45 domestic routes to its network, of which Rex operates 10.
Rex will also soon face new competition from low-fare startup Bonza (Sunshine Coast), which is planning to launch in mid-2022 on 25 domestic routes – 80% of which are unserved at present – using eight new B737-8s.