Rexit because QF wrecks it?

[CaptJCool]

Rex accuses Qantas of over-saturation as it bails on flight paths

Regional customers in South Australia and NSW will no longer have the option to fly with Regional Express.

7news.com.au

A matter for the ACCC?

 

[jase05]

Pretty sad really.

 

[drron]

Not necessarily sad for passengers.We have flown Rex to KI and paid an arm and a leg for tickets.
In Tassie I fly into either DPO or BWT-at the insistence of the employer when working in Burnie.Now flying QF into DPO is expensive compared to other QF flights of similiar distance but with other competitors but still cheaper than Rex into BWT.

As well there are other reasons why passenger numbers have fallen with less incoming tourists and the fires on KI.

 

[Scarlett]

Given that Rex still doesn't appear to have a fleet renewal plan (no comparable replacement for the SF340), this may just be the start as they shrink themselves down to a few most profitable routes and cannibalise airframes.

At some point they either have to take on QF link with larger aircraft, or become the regional arm of VA. Not sure there's any other option that keeps them in operation.

Guess there will be whinging, like this story, along the way.

 

[jb747]

It will be interesting to see how long KI lasts as a destination at all. I suspect it’s going to bear the brunt of the fires and virus.

 

[Dr Ralph]

To be expected I would think.

 

[p--and--t]

Given that Rex still doesn't appear to have a fleet renewal plan (no comparable replacement for the SF340), this may just be the start as they shrink themselves down to a few most profitable routes and cannibalise airframes.

At some point they either have to take on QF link with larger aircraft, or become the regional arm of VA. Not sure there's any other option that keeps them in operation.

Guess there will be whinging, like this story, along the way.

I'm only an outside observer with no expertise in the area but I also foresee other problems.

Not sure how old the REX fleet is, but I read somewhere based on flight cycles some of the 340s theoretically still have another 25 years to go so they have some time to go but eventually have to do something with fleet renewal as you have stated.

Their fares do seem pricy (e.g. Syd-Oag circa $250 one way for 50min) if you look at flight time only, but i guess smaller volumes drive up seat km costs significantly.

The dilemma I see as the Saabs become no longer fit for service is that there appears to be nothing to replace them at the same/similar size.

Elsewhere in AFF it has be pointed out due to regulations, if an aircraft goes over 50 seats then the airport costs of operation increase substantially.

So potentially for regional Australia we are caught between small planes wearing out that can't be replaced and larger planes who's costs may make the route unviable.

 

[jakeseven7]

I think REX sometimes bring this on themselves. ...

They have a monopoly route, gouge it to the eyeballs, a competitor sees the money they are making and thinks 'I'll have some of that thanks', start up, fares drop in response to increased supply and then REX screams capacity dumping and exits the route.

I too have suffered at the hands of REX monopoly routes and they aren't quite as perfect as they think they are. I'm not saying QFLink or the remnants of VARA struggling around are angels either by any means!

 

[jakeseven7]

Qantas more than doubles flights to Kangaroo Island.

See ya Rex.

“Now is the time to be supporting Kangaroo Island, not deserting it,” QantasLink CEO John Gissing said.

More Qantas flights to KI after Rex pullout

Qantas will more than double its flights to bushfire-hit Kangaroo Island in the wake of regional carrier Rex this week announcing it would axe the route - but the increased flights won't kick in until July.

indaily.com.au

 

[Mattg]

Qantas responds: “Rex has a track record for throwing tantrums”: Qantas doubles down on regional expansion - Travel Weekly

 

[Peter Morrissey]

Rex accuses Qantas of over-saturation as it bails on flight paths

Regional customers in South Australia and NSW will no longer have the option to fly with Regional Express.

7news.com.au

A matter for the ACCC?

It would be beneficial and keep Qantas honest that ACCC monitors the flight pricing and qurstion when it gors back up after a competitor exits a route.
That would be a better policing practise. Can guess that after pushing another out of a route, the price hikes back to max margin levels.

 

[phily]

It's called COMPETITION. Get over it Rex.

 

[Mattg]

It's called COMPETITION. Get over it Rex.

So, according to Rex, it's OK for them to have a monopoly on a route but not OK for another airline to have a monopoly on the same route (or to try to compete with Rex).

 

[p--and--t]

Undoubtedly more to it, but I was perplexed at the dates of the announcements. REX said they were pulling out of KI altogether, and then days later QF said ok we are increasing flights to cover where REX pulled out, and then REX complained QF took their business?

 

[Bundy Bear]

With Kangaroo Island I would guess that market is going to shrink after the recent bush fires, Qantaslink won't last.
Ballina is a route that Qantaslink should have been in ages ago and Rex have been milking that market for a while.

There are no replacement type aircraft for the 20-30 seat capacity and Rex and Virgin need to sort themselves out and come to some arrangement as they don't need to merge they just need to work together.

It was bound to happen as Qantas/Jetstar pulled out of Dash 8 service in NZ.

 

[Berlin]

Rex: Just shut the %$#@ up. Anti-competitive nonsense wont help with your overpriced rusty little buckets. This is clearly good for regional Australia and actually good for customers. It might be not good for Rex but hey, who cares.

 

[jase05]

Rex: Just shut the %$#@ up. Anti-competitive nonsense wont help with your overpriced rusty little buckets. This is clearly good for regional Australia and actually good for customers. It might be not good for Rex but hey, who cares.

Agree in part so long as QF doesn’t jack their prices up once Rex leaves a route. Sad to see Rex leave as my wife does about 4 trips a month to KI for work and they have always looked after her but I do think they are having a bit of a sook about it rather than try to make it work

 

[CaptJCool]

Something about a bat and ball and taking them home.

In all markets. Economies of scale means bigger players have larger hubs and lower cost per unit and can out-price competition.

The political system shows us - 2 main players and a 3rd position filled by one or more players. (Consider domestic airline industry in that category). If not for the 4 bank pillars likely we would have the same.... so in other industry, woollies and Coles with other players like IGA held up due to extended opening hours, location and convenience. COFFEE SHOPS ARE THE CLASSIC “monopoly” on the block because most of us only wish to walk so far from the exit of our city office. Location, location, location

Monopoly and duopoly are not healthy competition but the irony of it is that healthy competition results in collapses and sell-outs to a stronger player leading to a duopoly... it’s the nature of biggest fish in the pond. So what price loyalty? And what role for the ACCC?

So A new place has 6 months to prove itself to customers unless they like the crowd which would extend the loyalty period to 12 months or they linger longer ....

PS
Imagine if we classified airlines like the categories in this article ?

19 Reasons Anyone Would Go to a Coffee Shop

What brings you to the flavored watering hole?

spoonuniversity.com

 

[Berlin]

Agree in part so long as QF doesn’t jack their prices up once Rex leaves a route.

Of course- ideally have three or more carriers. Virgin, how about...?

 

[eastwest101]

Like others, I suspect that the Qantaslink services to KI won't last too long and QF may end up ceasing the service, then I suspect that the Fed and/or State Government will have to get Rex back in to KI with a subsidised service.

Ballina on the other hand should have been looked at ages ago if Qantas management weren't so distracted with their Jetstar frolics they would have already been in that market for years.