Rex will drop its Canberra-Sydney services from Monday, a little more than a year since the airline launched the route as part of an expansion of its regional and domestic network.
The axing of the service again casts doubt on the ability of the Australian market to support multiple carriers, with Rex blaming the entrance of an additional operator, Virgin, on the route and an increase in charges at Sydney Airport from 1 June.
Rex deputy chairman John Sharp said that the airline was proud to have brought competition to the Canberra-Sydney route and contributed to lower airfares.
“Airfares have never been cheaper,” Mr Sharp said.
“Unfortunately, with the entrance of an additional operator and the very high charges imposed by Sydney Airport from 1 June 2022, the route is no longer viable for Rex.
“The resources will be diverted to other routes which will provide a better return.”
A Sydney Airport spokesperson rejected Rex’s claims that its rising fees had contributed to the route’s demise.
“Sydney Airport made a number of attempts to support Rex’s operations on the Sydney-Canberra route, and we were making good progress on coming to an agreement,” the spokesperson said.
“Rex’s suggestion that Sydney Airport is partially responsible for them exiting the route is disappointing and inaccurate.”
Rex will also axe its services between Albury and Melbourne from Monday.
The last flights will operate on Sunday. Affected passengers will be offered free of charge rerouting or a refund.
When Rex launched the Sydney Saab 340 service in April last year, Mr Sharp accused Qantas of gouging travellers. The regional carrier pinned its hopes of $99 one-way tickets to secure a viable chunk of the market, offering seven return flights a day.
A study also showed that the Rex flights would add $200 million to the ACT economy every year.
But from 30 January this year, Virgin Australia teamed up with Canberra-based Link airways to restart its service between the two capitals with up to nine flights per weekday on Link’s Saab 340 B Plus aircraft.
Canberra Airport Head of Aviation Michael Thomson said the announcement was disappointing.
“Rex remains a valuable partner, and although we are disappointed about losing the Sydney service, we continue to work with Rex on their Melbourne service and any other future opportunities,” he said.
Chief Minister Andrew Barr said it was too early to tell what impact the decision would have on Canberra tourism.
He said that overall, the frequency on the Canberra-Sydney route had increased since last year with the Virgin/Link partnership now providing 10 flights a day on weekdays.
Rex is still flying other services out of Canberra, including to Melbourne, and Mr Barr said the ACT Government would continue to work with it on those routes and any others that might be proposed.
He said it was unlikely that another operator would step in to replace Rex.
“In the current aviation market, it appears that the passenger numbers to support three carriers was a difficult proposition,” Mr Barr said.
“We hope that as the market recovers and grows, Rex will consider other routes out of Canberra in the future.”