Price War: Virgin, Rex Sell $49 Sydney-Melbourne Flights

Regional Express Boeing 737-800
Rex will launch Boeing 737-800 flights between Sydney and Melbourne next month.

Rex and Virgin Australia are embroiled in a bitter price war, with both airlines discounting Economy class airfares between Sydney and Melbourne to just $49 one-way, including checked baggage. Both airlines have also reduced Business Class airfares to just $199 one-way as Rex prepares to launch Sydney-Melbourne flights on 1 March 2021 using ex-Virgin Australia Boeing 737s.

Rex began selling its new Sydney-Melbourne flights last December with airfares starting from $79 in Economy and $299 in Business. But yesterday, Rex dropped its Economy fares to $48.99 and Business to $199. Its “Rex and the cities” sale ends on 28 February 2021, and covers travel dates in March 2021.

Rex is heavily discounting fares on its new Sydney-Melbourne jet services.
Rex is heavily discounting fares on its new Sydney-Melbourne jet services.

Rex says that customers will be entitled to a full refund if their travel plans are disrupted by COVID-19.

Virgin Australia quickly matched Rex’s sharp pricing with $49.01 sale fares on selected Sydney-Melbourne flights, for travel during March. Business Saver fares have also been reduced to $199 one-way. (A Business Saver ticket from Sydney to Melbourne earns 50 Velocity status credits, so this is also quite a good deal for earning status credits.)

Both Rex and Virgin Australia give 23kg of complimentary checked luggage, and Rex promises complimentary snacks and drinks in Economy.

Jetstar, meanwhile, is selling Sydney-Melbourne flights from just $39. However, the Jetstar fares at that price do not include checked baggage (or anything other than the seat).

Qantas Economy tickets on the Sydney-Melbourne route are currently available from $110 one-way, for travel from 1 March. Prior to Rex starting Sydney-Melbourne flights, the cheapest Qantas Economy tickets on this route are $159 one-way.

But Qantas is not discounting its Business Class fares between Sydney and Melbourne, which remain at $923 one-way throughout March. Clearly, Qantas feels that its Business Class product is so much better than its competitors that it doesn’t need to compete on price.

Here’s a summary of current Sydney-Melbourne airfares for travel in March 2021:

Economy Business
Jetstar $39 N/A
Rex $48.99 $199
Virgin Australia $49.01 $199
Qantas $109.79 $923

Rex has already reduced Sydney-Melbourne frequencies

When Rex announced the launch of Sydney-Melbourne flights last December, it had initially planned to operate nine daily return Boeing 737 flights. Rex has since reduced its initial schedule to just six daily flights.

With Rex also now heavily discounting airfares to prices that are likely below cost, perhaps demand isn’t as high as the airline originally hoped for. (The frequent and unpredictable changes to state border restrictions certainly don’t help with this either.)

Join the discussion on the Australian Frequent Flyer forum: Rex to fly between Australian capital cities

Double Velocity points

While Virgin Australia and Rex are offering very similar in-flight products on the Sydney-Melbourne route at almost identical prices, Virgin’s Velocity Frequent Flyer program gives it a competitive edge over Rex (which doesn’t yet have a proper loyalty program).

In a bid to further incentivise Velocity members to book with Virgin Australia, the airline is also now offering double Velocity points on new flights booked by 17 February 2021. This promotion covers flights taken until 5 January 2022. To take advantage of this promotion, you’ll need to first activate the offer on the Velocity Frequent Flyer website.

Many other domestic routes are also on sale

The most intense price war is currently taking place on the Sydney-Melbourne route, which prior to COVID-19 was the world’s second-busiest air route. But Virgin Australia and Qantas flights on many other domestic routes are also currently on sale.

Virgin Australia’s “Let the good times fly” sale has been extended to 15 February 2021. Fares start from $75 (e.g. Sydney-Ballina).

And Qantas has released 1 million sale fares as part of its current “Spirit of Australia Sale”, which also ends on 15 February and covers travel dates from mid-March 2021. Qantas fares start from $99 (e.g. Sydney-Ballina or Launceston-Melbourne). Some Qantas Business class flights are also on sale, such as Melbourne-Gold Coast flights starting from $399.

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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]