Australia’s Rex targets mid-market niche

Rex – Regional Express (ZL, Wagga Wagga) is planning to position itself as a “mid-tier” airline with a hybrid type of product, offering more amenities than low-cost carrier Jetstar Airways (JQ, Melbourne Tullamarine) but less than what Qantas (QF, Sydney Kingsford Smith) or Virgin Australia (VA, Brisbane Int’l) offer, the carrier said in an investors prospectus seen by the Executive Traveller. The airline plans to enter the narrowbody segment on March 1, 2021, and is hopeful that the market disruption caused by the COVID-19 pandemic will provide an opportunity for a new player. Rex currently operates regional flights in all Australian states besides the Northern Territory using a fleet of fifty-seven Saab S340 turboprops. In its initial phase of mainline operations, Rex plans to operate fewer than five B737-800s – presumably dry-leased units taken over from Virgin Australia, which is undergoing restructuring – on the three most profitable routes connecting Sydney Kingsford Smith, Melbourne Tullamarine, and Brisbane Int’l. Afterwards, the carrier plans to add Perth Int’l, Canberra, and Adelaide to its network out of Sydney airport and grow its fleet to eight to ten Boeing narrowbodies. Rex said that it would then target the addition of one or two B737s per month, subject to demand. The first B737-800 is expected to be delivered in October 2020 following which it will undergo pre-delivery maintenance and outfitting at the carrier’s in-house MRO facility at Wagga Wagga airport. Rex has yet to announce whether it will operate its aircraft in an all-economy layout or also with premium cabin seats. The regional specialist has tentatively secured up to AUD150 million Australian dollars (USD107.7 million) in investment from PAG Asia Capital.