Regional Express (Rex) is quitting the key Sydney - Canberra route this weekend, citing competition and Sydney Airport fees as the reasons why. Tuesday's announcement follows Rex last week confirming it would exit the Melbourne - Albury route. Rex's last flights on both routes will operate on Sunday, May 29.

Rex quits its second route in as many weeks

Rex flies the short 147 mile (236 kilometer) sector three times a day (once a day on Saturdays) in either direction using 34 seat Saab 340 turboprops. Also on the route is Virgin Australia (albeit using identical Link Airways Saab 340s) and QantasLink who use a mixture of Dash 8-400 and Boeing 717-200 aircraft on the route.

In contrast with Rex, Virgin Australia operates between seven and 11 flights in either direction on weekdays (but drops back just four return flights on Saturdays). QantasLink owns the market. On its slowest day (Saturday) the airline operates nine return services on the route. On weekdays, QantasLink operates up to 21 return flights a day - including selected peak-hour flights using the Boeing jets.

"We are proud to have brought much-needed competition to the Sydney-Canberra route, and airfares have never been cheaper," said Rex Deputy Chairman John Sharp AM. "Unfortunately, with the entrance of an additional operator and the very high charges imposed by Sydney Airport from June 1, 2022, mean that the route is no longer viable for Rex. The resources will be diverted to other routes which will provide a better return."

Competiton sees off Rex on the Sydney - Canberra route

Rex only started flying the Sydney - Canberra route in March 2021. It fitted nicely with the airline's ambitions to connect Australia's southeastern capital cities. It was also an opportunistic play, with Virgin Australian then off the route and Qantas enjoying sole operator status. Rex's cheaper fares gave the airline a point of difference and appealed to travelers not flying on the taxpayer's dime.

With Canberra home to the Australian Government, a very high portion of travelers on routes in and out of CBR fly on government business. Despite lowest available fare policies, most of these flyers remain rusted on Qantas loyalists - a loyalty Qantas is very good at maintaining. Virgin Australia (via Link Airways) recently re-entered the SYD - CBR market to crack that Qantas focus. Its Canberra flights are reportedly reasonably full. In 2019, the year before COVID-19 disrupted flights, over 930,000 passengers flew the Sydney - Canberra city pair, making it the 17th busiest route in Australia.

Rex pays more for flying an inter-capital route

Rex primarily flies its Saab turboprops on regional routes, and Sydney Airport charges lower fees for regional flights. Despite flying small aircraft on the Sydney - Canberra route, that route is considered a non-regional route inter-capital route and incurs higher charges. It's an additional operational cost all operators on the sector have to wear, but it appears Rex is no longer willing or able to do so.

“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," says a Sydney Airport spokesperson. "Rex’s suggestion that Sydney Airport is partially responsible for them exiting the route is disappointing and inaccurate.”

Ignoring aircraft parking and runway charges, per passenger charges at Sydney Airport's Terminal 2 (which is home to Rex) rise from AU$5.91 per passenger on a regional flight to $12.95 per inter-capital passenger. Runway charges also change from $3.78 per 1000 kilograms of a plane's maximum takeoff weight to $5.90 per paying passenger. These charges aren't necessarily fixed as Sydney Airport frequently works out deals with individual airlines.

Rex advises that impacted passengers will be accommodated on other flights (Rex maintains its Canberra - Melbourne Boeing 737-800 flights) or offered a full refund.