REX plane takes off at Ballina Airport.
REX plane takes off at Ballina Airport.

Regional airline quits Ballina, lodges official complaint

REGIONAL Express (Rex) Airlines has decided to stop flying between Sydney and Ballina.

The company said the decision was taken by the board, "in light of the sharp downturn experienced in the last six months and the poor economic outlook for the next 12 months".

"This is not a decision that Rex has taken lightly having serviced Kangaroo Island continuously for 30 years and Ballina for 24 years, first as Kendell Airlines and then as Rex since 2002," a statement from the board read.

Qantas announced it will resume flights between Ballina and Sydney on March 29, under the QantasLink brand, operated by a 50-seat propeller-driven Bombardier Dash 8 Q300 aircraft.

Rex will also stop flying between Adelaide and Kangaroo Island in South Australia.

Regional Express also announced that it has raised an official complaint to the Australian Competition and Consumer Commission (ACCC) about Qantas' behaviour of dumping excessive capacity on routes that are already extremely marginal.

The direct impact of this conduct is to force out the smaller competitor and substantially lessen competition in the long term.

Rex will be citing Qantas' behaviour in three regional routes that go beyond "competition on the merits", and one of them is Sydney to Ballina.

"On January 17, 2020, Qantas announced that it would mount additional services on the Sydney to Ballina route with effect from March 29," said a statement from Rex.

"The new service targets the only service which Rex operates between Sydney and Ballina (early morning departure from Ballina and late evening return from Sydney).

"This service currently has 10,000 annual passengers serviced by Rex with 18,000 annual seats. The addition of the 36,000 annual seats from QantasLink would mean the load factor would fall to 19%."

Rex also said the additional capacity introduced by Qantas on these routes kills the ability for Rex to offer a sustainable alternative to the Qantas model for regional communities and increases Qantas' market power.

"Rex has been a steadfast partner to Kangaroo Island, Ballina and other regional and remote communities for decades, faithfully providing reliable, safe and frequent air services with affordable fares."

"In fact, even though Rex is the sole operator across 80% of its vast regional network, Rex's average fare has risen only 1.2% annually since Rex was formed in 2002.

"However, Rex has to face up to the reality that it is not able to match Qantas' financial firepower and unlike Qantas, Rex is not able to continue servicing a money-losing route indefinitely."

The complaint to the ACCC also includes the Adelaide to Whyalla and the Adelaide to Kangaroo Island routes.

"Rex's only recourse is to appeal to the ACCC to stop this anti-competitive conduct now that the ACCC has an effects test in section 46 that can be enforced."

"Qantas has won this round, but in the longer term the communities are the real losers.

Regional Express (Rex) operates a fleet of 60 Saab 340 aircraft on some 1,500 weekly flights to 60 destinations throughout all states in Australia.



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