Upstart Rex Airlines is kicking off its long-awaited Boeing 737-800 services on the Sydney – Melbourne sector with a price war. Rex’s services are set to begin on March 1, and the airline is already making a splash. Rex is offering one-way fares at AU$49 (US$38), making popping down to Melbourne for Sunday lunch a tempting proposition.
“Most taxi rides to the airport cost more than $49. This is a wonderful opportunity for travelers to get between Australia’s two biggest cities on a whim,” says Rex’s John Sharp in a statement.
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Rex brings a fare war to Australia’s number one domestic air route
Rex’s arrival on Australia’s number one domestic air corridor will add some much-needed competition to the route. In 2019, the Sydney-Melbourne corridor supported 60 424 flights, carrying 9.18 million passengers. Passenger loads averaged 85.2%.
It’s a highly lucrative route that’s traditionally carved up between just two airline groups. Most recently, that’s been Virgin Australia and its subsidiary, Tigerair Australia, and Qantas and its subsidiary, Jetstar.
Now, Rex is arriving to crash that cozy party. Since announcing the start of flights on the sector last year, Rex has always said its fares would be keenly priced. It’s not alone in this.
Virgin Australia’s CEO Jayne Hrdlicka also predicted the same outcome. Qantas prefers to fly above the middle and cost-conscious market, but it too is running a sale right now.
If you look at picking up a fare between Sydney and Melbourne 28 days from now, on Thursday, March 11, Qantas has 25 flights operating out of Sydney down to Melbourne. Fares start from AU$110 with good availability. Qantas fares are all-inclusive. You can choose your seat, check-in baggage, enjoy inflight WiFi, and get fed. Fly after midday and you can enjoy Qantas’ own in-house beer for free.
“People know exactly what to expect when they book with Qantas,” said a Qantas spokesperson earlier this week. Qantas has also improved ticket flexibility and change processes while putting one million seats on sale across Australia starting from AU$99.
Virgin Australia is matching the Rex price
Virgin Australia has responded in kind. On March 11, it has 17 flights heading down to Melbourne on its Boeing 737-800s. Virgin Australia matches the Rex offer, with fares starting at AU$49.01 on five of those flights. The remainder of the flights start from AU$119.
While Virgin Australia offers free seat selection and checked-in baggage, hungry economy class passengers won’t get much more than a coffee onboard, and there’s no WiFi.
“We’ve raised the bar even higher,” says Virgin’s Jayne Hrdlicka today, “matching some of the lowest airfares in the market, complete with checked-baggage, seat selection, double Velocity Points on eligible bookings, and our award-winning service.”
But back to the airline that’s started this handy (from a passenger’s perspective) price war. It has got eight flights to Melbourne on March 11 from Sydney. On seven of those eight flights, the economy class fare is AU$48.99.
Rex’s fare includes 23kg of checked baggage, seat selection, tea and coffee, and a complimentary inflight snack. It won’t include alcoholic drinks, although there will be a selection of drinks available for sale. Rex has no plans to offer complimentary inflight WiFi either.
However, with sub $50 fares, let’s not quibble about the details. These are very good prices. Unlike most bargain fares, they also allow free flight changes. Rex even promises to refund your fare if circumstances mean the booked flight cannot operate.
A fierce assault on Jetstar’s market
Qantas won’t come down to these prices. But it’s going to be interesting to see how its low-cost subsidiary Jetstar responds. It often offers lead-in fares on the Sydney – Melbourne sector for around $49. But that doesn’t include checked baggage, seat selection, or catering. Add those, and the cost of your cheap ticket to Melbourne can easily double.
Both Rex and Virgin Australia’s current fares aren’t a competitive assault on Qantas, rather Jetstar. While some people might sniff about flying Jetstar, the low-cost airline is a big money-spinner for the Qantas Group and commands a big chunk of the cost-conscious domestic travel market.
Meanwhile, barring further internal border issues between Sydney and Melbourne, these fares are just the thing to get people in the air and away for the weekend. It will be welcome news for hoteliers, restauranteurs, and barkeepers in both cities.