Rex accuses Qantas of predatory behaviour, withdraws from routes

justinbrett

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The slight fly in that ointment for QF is that previously loyal QF flyers (such as yours truly) are looking at the QF fare premium and questioning the ongoing value proposition. Especially when
A) QF has been doing all it can of late to degrade the customer experience; and
B) J fares on VA can be had for not dissimilar rates to some Red-e fares on QF if you’re flying at certain times of the day or week

What does the balance sheet look like though? Filling the plane isn't worth as much if you've only sold cheap fares to do so. We'll never know now that VA is private.

Also have to remember that JQ is also competing in the lower end of the market as well.
 

jase05

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Most of QF's premium / business / corporate customers, the ones that contribute to their yield are not really that concerned about $50 retail rate differences here or there was the argument. Which from my experience is very true.
Freight is still propping up QF and that is where they have the massive advantage.
 

AussieJasmine

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The slight fly in that ointment for QF is that previously loyal QF flyers (such as yours truly) are looking at the QF fare premium and questioning the ongoing value proposition. Especially when
A) QF has been doing all it can of late to degrade the customer experience; and
B) J fares on VA can be had for not dissimilar rates to some Red-e fares on QF if you’re flying at certain times of the day or week

QF knows they'll still get tons of repeated business, especially in J class, pretty much regardless of how terrible the service is, as they're the only Australian carrier to have anything approaching a proper international network and proper alliance membership for easy interlining, which for businesses and government agencies (who foot the bill for a big chunk of the people in J), is all they really care about. And to be fair, compared to the standards of many European and US carriers, QF is still pretty decent.
 

AussieJasmine

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Freight is still propping up QF and that is where they have the massive advantage.

I believe QF Freight use JQ flights to move a lot of cargo too - don't know whose balance sheet it'll show up on but on the ground it surely contributes to making some otherwise marginal JQ flights more valuable to the group overall.
 

jase05

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I believe QF Freight use JQ flights to move a lot of cargo too - don't know whose balance sheet it'll show up on but on the ground it surely contributes to making some otherwise marginal JQ flights more valuable to the group overall.
JQ is heavily used for freight and due to the ease of loading and unloading the A320’s theyare preferred for many of the bigger contracts
 

Carrots

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Kangaroo Island has fallen off the map now as well.

Along with other towns including Ballina, Bathurst, Grafton and Lismore (assume all ex Sydney?).
 

Mwenenzi

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Yes: more problems for REX--->Media Releases
REX ADJUSTS REGIONAL NETWORK
Rex today confirmed the withdrawal of services from the following five regional centres:
  • Bathurst
  • Grafton
  • Lismore
  • Kangaroo Island
  • Ballina
Flights to these five centres will cease on June 30, coinciding with the end of the Federal Government’s Regional Airline Network Support (RANS) program, except for the Ballina route, which will terminate on July 2.

Two other NSW regional routes are pending further review.
<snip>

ExecTrav---> Rex cuts five regional routes, two more under review

On 1 or 2 of those routes they have no competitor.
 
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jb747

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Fares Following Final Flight:
Which is basically $120 from Albury to Sydney, and then $200 to fly Sydney-Melbourne. Over about 6 hours, for a 3 hour drive or 4 hour train ride.

If Bonza does become more than vapourware, and they do operate to Albury, I can’t see any remaining room for Rex.
 

Melburnian1

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Which is basically $120 from Albury to Sydney, and then $200 to fly Sydney-Melbourne. Over about 6 hours, for a 3 hour drive or 4 hour train ride.

If Bonza does become more than vapourware, and they do operate to Albury, I can’t see any remaining room for Rex.

Albury to Southern Cross, Melbourne is only three and a quarter hours on NSW TrainLink's XPT, or two hours 45 if one's destination (or origin) is Broadmeadows. V/Line is slower, but timetables will be sped up when those VLocity railcars take over all that operator's trains.
 

henrus

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Rex has announced flights from Melbourne to Devonport to start sometime in August. They say they are using aircraft taken from the now-defunct MEL - ABX route
Notably today's media release had 7 paragraphs and managed to mention Qantas 3 times, twice using the "Qantas predatory" phrase (perhaps they should trademark it).

The only logical thing here is for Qantas to claim Rex is being "predatory" by launching on a route they have a monopoly on. All that being said my moneys on Qantas for this one. They have a Qantas Club in Devonport and a strong 3-4 flight per day schedule already in operation.
 

Harrison_133

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The press release on their website is…well…strange. Saying they’ve been courted by the local community was a nice touch. Worth noting too that they used to fly to Devonport many years ago. Pulled out around 2005 if I recall correctly.

I think they’ll do ok to Devonport. They seem to be finding some success on other routes where QantasLink was the sole operator (e.g. SYD-CFS/PQQ). Growing the regional network really should be their focus.

They have a Qantas Club in Devonport and a strong 3-4 flight per day schedule already in operation.
They called out Qantas for having poor service levels, but as you say they’ve maintained a 3-4 daily schedule. Although the Q300 flights out of Melbourne have been quite unreliable lately with lots of delays and cancellations. Maybe they’re having a jab at that?

The other thing they’ll have to contend with, and hopefully don’t underestimate, is the amount of people who get in the car and drive to Launceston to fly Jetstar or Virgin on a “jet.”
 

henrus

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Although the Q300 flights out of Melbourne have been quite unreliable lately with lots of delays and cancellations. Maybe they’re having a jab at that?
Can't say that their 20-30 year old SAAB's are anything special either.

Interestingly (according to a SMH article) the ACCC last week dismissed Rex's complain about Qantas' predatory behaviour.

Regardless Rex's market share sits at just 4% according to the ACCC's latest report (QF is 37% and VA 31%)
 

AussieJasmine

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The Saabs are a joke. Qantas squandered their relief money on their 737 fantasy, when that money really should have gone into reinforcing their core regional market by starting a realistic plan to phase out the Saabs and move to ATR-42s. It might even let them offer a realistically competitive product compared to other airlines rather than, ya know, driving.

If Rex really is obsessed about keeping security exemptions on flights, then there's option to make a virtue out of necessity by having ATRs in a low desnity configuration, deleting the usual forwardmost rear facing pair of seats (row 1), and making rows 2 and 3 a 2+1 J class product, with 9 rather than 10 rows behind. This should take the usual all economy 31" 48 seat layout down to fit the 40 seat rule. It still offers a bit more capacity than the Saabs, with a much higher quality ride and 6 premium level seats to boost revenue and attract corporate customers - they'd be the only regional prop service offering it.

Yep, their Saab fleet is huge so they couldn't hope to replace all the fleet, but they could have at least made a start.
 

jb747

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Albury to Southern Cross, Melbourne is only three and a quarter hours on NSW TrainLink's XPT, or two hours 45 if one's destination (or origin) is Broadmeadows. V/Line is slower, but timetables will be sped up when those VLocity railcars take over all that operator's trains.
And it’s such a joy sitting on the train, listening to the moron/bogan in the seat in front having a conversation on speakerphone, whilst the traffic on the highway passes you by. It’s not a winner by a long shot. We don’t need ‘fast trains’, but it’s hard to believe we still can’t manage 130 or so.
The Saabs are a joke. Qantas squandered their relief money on their 737 fantasy, when that money really should have gone into reinforcing their core regional market by starting a realistic plan to phase out the Saabs and move to ATR-42s.
You might want to get your airlines right….

As predicted, the loss of the Rex timetable is causing issues with the local medical fraternity. Previously, it was possible for a specialist to fly from Melbourne in the morning, do a full day’s work, and then fly back home in the evening. The QF timetable makes that impossible, with only the one flight in each direction each day. So, now the patients will have to fly to Melbourne….perhaps that’s AJ’s cunning plan to increase loads.
 
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