Domestic Price War Heats Up with $39 Full-Service Fares

Rex, Virgin, Qantas 737s
Rex, Virgin & Qantas are engaged in a fierce price war on the Sydney-Melbourne route.

Rex has dropped thousands of $39 one-way fares on the Sydney-Melbourne route, for travel until 28 August 2021. Virgin Australia has followed with its own $39 Sydney-Melbourne fares, meaning you can now travel between Australia’s two largest cities for under $40 – with checked baggage included – on your choice of two different airlines.

The Rex $39 fares include 23kg checked baggage and a snack with water, tea or coffee on board the flight. However, Rex seat selection costs at least $6 extra and this price does not include Rex’s credit card surcharge or 1% “booking/handling fee” for online bookings (which can only be avoided by paying cash for your ticket at a Rex airport check-in counter).

Although the $39 fares are limited, plenty of flights have cheap seats available for booking on the Rex website.

Rex website screenshot
There’s no shortage of Rex flights with $39 airfares available.

With Virgin Australia, the $39 airfares aren’t available on every flight and aren’t really being advertised. But there are plenty of cheap tickets available between Sydney and Melbourne if you search on the Virgin Australia website.

VA website screenshot
$39 Melbourne-Sydney sale fares are available on the Virgin Australia website.

Virgin is also matching Rex’s $299 Business Class airfares on the same route. (If you’d like to compare the experience, Australian Frequent Flyer has recently reviewed both the Rex 737 Business Class and current Virgin Australia 737 Business Class products.)

The Virgin Australia $39 fares book into the “Getaway” category. With Virgin, the price includes 23kg checked baggage, seat selection, in-flight entertainment (via the Virgin Australia Entertainment App) and tea, coffee or water onboard (but snacks will cost extra). Velocity Frequent Flyer members can also earn at least 195 Velocity points + 7 status credits with this ticket, and Velocity Gold & Platinum members would have access to Virgin Australia’s airport lounges. (In Melbourne, where Virgin’s regular lounge is currently being renovated, eligible flyers have access to one of two temporary Virgin Australia lounges.)

Although Rex also operates its own lounges in Sydney and Melbourne, they are only available to Business passengers or Rex Lounge members. Alternatively, you could pay $33 for casual access – but the value would be questionable as Rex’s lounges aren’t up to the same standard as Virgin’s airport lounges. Rex also doesn’t have a frequent flyer program, other than Rex Business Flyer which was only available to businesses and is not currently accepting enrolments.

Meanwhile, Qantas has dropped its fares on the Sydney-Melbourne route to as low as $79 – still double what Rex & Virgin are charging. Its low-cost carrier Jetstar now has $30 airfares on most Sydney-Melbourne flights, but the $30 Jetstar fares do not include checked baggage.

“Cheaper than a bus ticket”

Rex says that its $39 fares are cheaper than catching a bus between Sydney and Melbourne. This is not quite correct as Firefly currently has bus tickets from Sydney to Melbourne available from $35. But it’s still a very cheap price for a plane ticket (and much more convenient than spending 12 hours on a bus).

Firefly website screenshot
Firefly Express bus tickets from Sydney to Melbourne start at $35 one-way.

“I believe this initiative will singlehandedly revive a moribund travel and hospitality industry in the two cities. The resulting copycat moves from our competitors will mean that there
will be hundreds of thousands of $39 fares available,” Rex Deputy Chairman John Sharp said.

The Sydney-Melbourne route is not covered by the federal government’s TANS program which offers half-price plane tickets on selected domestic routes.

Rex struggling to fill its jets

Rex normally sells fares on the Sydney-Melbourne route starting from $79, although it had reduced prices to as low as $49 in February, ahead of launching Boeing 737 jet services.

Since launching jet services, however, it has been widely reported that Rex has been struggling to fill its planes – particularly on the Sydney-Melbourne route. Some flights on the 170-seat jets have had passenger numbers in the single digits, and at least one flight appears to have had no passengers at all. This has not gone unnoticed by Qantas CEO Alan Joyce.

“In March, its Deputy Chair John Sharp told media that passenger numbers on their new jet services are “better than expected” but declined to give any detail,” Mr Joyce said last month.

“When confronted with figures showing aircraft were only 20 per cent full, he said competitors were spying. Not that the figures were wrong – but that people were daring to look. He mustn’t have seen the pictures that lonely customers were posting on social media of empty REX cabins.”

Anecdotally, many flyers still seem to be unaware that Rex is now flying on routes like Melbourne-Sydney, Melbourne-Adelaide and Sydney-Gold Coast. Some have commented that Rex seems to be over-reliant on free publicity (using stunts such as ferociously attacking Qantas in public, complaining to the ACCC or, indeed, reducing fares to $39) while spending almost no money on advertising to increase brand awareness.

Meanwhile, with Virgin Australia matching Rex’s cheap tickets, some are choosing to fly Virgin instead for the same price.

Join the discussion on the Australian Frequent Flyer forum: SYD-MEL for $39 with Rex or Virgin

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]