24 May 2022

Rex bails out of 'unviable' Canberra-Sydney route

| Ian Bushnell
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Andrew Barr, John Sharp and Stephen Byron

Chief Minister Andrew Barr, Rex deputy chair John Sharp and Canberra Airport CEO Stephen Byron last year when the route was launched. Photo: Region Media.

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.”

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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.

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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.”

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Clever Interrobang5:51 am 27 May 22

People talk about high speed rail

by the time it takes for it to get built (if it ever does) most of the people reading this or commenting will be at retirement age and probably not commuting regularly from canberra to sydney

Capital Retro8:11 am 27 May 22

Most of the travelers on the current service are retired and probably get travel concessions. The service must run at a massive loss.

Clever Interrobang5:49 am 27 May 22

I’m surprised any of the airlines can really make money from canberra-sydney flights

Most people who travel to sydney regularly don’t fly there

…and raising the price just makes it less justifiable for most people to spend the money flying there

Sure, there are always people who need to fly to Sydney, but surely it’s never been profitable

High speed rail will never come to Australia. The population is to small and government subsidies would be to high. It can not stand on its own two feet.

@clarkea Well said. Every time there is talk of a high speed train, the private consortia which show any interest immediately talk tax concessions and other government handouts because they know such a venture would not be profitable in of itself. Such an undertaking would be our light rail project on an even grander scale.

You summed up this article about light rail – spot on, you……

Clever Interrobang5:53 am 27 May 22

that’s because trains have always been historically run by state governments and needed public funding

this idea of privatising the train network is a relatively new one and has never ever been viable outside of a few specific well serviced areas where the government already built the infrastructure and then sold it

I wonder how many of these people whining actually supported Rex when they where flying to Sydney. Or are you looking for something to complain about.

Very predictable… unfortunately.
And as for the Fast train… just upgrade the slow-last century train to be faster…
how many studies have been done on this?
CAG don’t really care, they have the monopoly and would love any train upgrades never to come to fruition.
Just fix it!

David W Jones11:16 am 25 May 22

Take away Lounge Membership from the salary Sacrifice packages and then maybe a regional airline might get a chance to hold some of the market and stop the big players charging $199 CBR to SYD when the only charge $59 SYD to MEL!

Public Servants by-pass the “Cheapest Fare on the Day” rule because they have “Lounge” benefits with the big carriers and their supervisors don’t care. It costs tens-of-thousands in extra Travel Costs and Lounge Membership it available on Salary Sacrifice!

Capital Retro9:44 am 25 May 22

Did Rex get taxpayer funded COVID support like the billions of dollars that Qantas got?

Apparently Rex did receive government handouts, Capital Retro – https://australianaviation.com.au/2020/09/rex-increases-revenue-thanks-to-62m-government-aid/ … but not to the level that Alan Joyce squealed for and received.

Capital Retro8:09 am 27 May 22

Thanks JS. Qantas must have been very close to hitting the wall. A lot of super funds would have lost heavily if Qantas went under.

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