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Regional Express (Rex) has begun selling seats on its new Boeing 737 jet services between Sydney and Melbourne at just $79 for Economy class and $299 for Business class.
Rex plans to operate 9 daily return flights on the Sydney-Melbourne route from 1 March 2021. It will initially use three Boeing 737-800 aircraft to do this. Rex says it will then take delivery of 2 more planes by easter, enabling the launch of Sydney-Brisbane flights in April next year.
Other domestic routes, such as Melbourne-Brisbane, Sydney-Adelaide, Sydney-Perth and Sydney-Canberra could follow.
“If all things go as planned, we hope to grow our fleet to 8-10 by the end of 2021,” Rex Deputy Chairman John Sharp said.
Until now, Rex has exclusively operated a fleet of Saab 340 regional turboprop aircraft which fly from major centres to country towns. This is the first time Rex has acquired jets to compete with Qantas, Virgin Australia and Jetstar on domestic trunk routes between capital cities.
What will Rex’s domestic Boeing 737 product be like?
Rex is marketing itself as a premium full-service option charging budget airline prices. On Rex’s domestic trunk routes such as Sydney-Melbourne, all Economy class passengers will receive a 23kg checked baggage allowance, a snack, and water, tea or coffee. Pre-assigned seating is available, although customers with discounted “Promo” tickets will have to pay $6-15 to choose a seat.
Business Class passengers will receive 32kg of checked baggage, lounge access, complimentary food & drinks and free wi-fi on Rex flights. Rex has never offered a Business class product so it’s not yet clear how substantial the Rex Business class meals will be. But we do know that alcoholic beverages will be complimentary in Business class.
Rex did not make any mention of in-flight entertainment, which indicates this will most likely be unavailable on its flights. However, passengers may be able to stream entertainment using the in-flight wifi (which will be available for an additional charge to Economy class passengers).
The interior of Rex’s Boeing 737-800s will likely be almost identical to that of Virgin Australia’s older planes. That’s because these are ex-Virgin Australia Boeing 737s! Rex will keep the 8 Business class seats at the front of the plane – although the Virgin logo will be removed. And the Economy seats are likely to be much the same.
On Rex’s Boeing 737 flights, the exit row seats are being marketed as “Rextra Legroom” and sold for a premium of $15. Rows 3-5, which were Virgin Australia’s extra-legroom Economy X seats, are not being marketed as Rextra Legroom. But they are being sold also for $15, when all other seats cost $6 or $10.
Rex is undercutting Qantas & Virgin
As part of its launch sale, Rex has released 100,000 Economy class seats between Sydney & Melbourne for $79 one-way. Business Class seats are on sale from just $299 each way. That is signficantly cheaper than Qantas, and also undercuts Virgin Australia on price. At the same time, Rex will continue to offer a complimentary snack and checked baggage to all passengers – things Virgin appears to be removing from its Economy class product.
“This is an exciting opportunity for travellers. For the first time they don’t have to choose between low fares with minimal service and premium pricing for more reliable flights. Over the past 20 years Rex has been the most reliable passenger carrier in Australia and our domestic services will naturally enjoy this superior reliability at affordable prices,” Sharp said.
It’s not yet clear how Rex will guarantee superior reliability when it has a fleet of just three jet aircraft. When Rex launches Sydney-Melbourne flights, each of those 3 aircraft will operate six daily Sydney-Melbourne flights with turnaround times of 55-60 minutes between flights. That’s theoretically sufficient time to recover from minor delays between flights, but Rex would have to cancel up to one-third of its daily flights if any of those aircraft become unserviceable.
Rex vs Virgin
Rex and Virgin Australia seem to be targeting identical “mid-market” segments here. Both are promising to provide better value than Qantas and better products than Jetstar. But if Rex ends up having a better product and lower prices than Virgin, the latter could be in real trouble.
Rex’s fares are not much more expensive than Jetstar whose cheapest fares on the Sydney-Melbourne route are currently $71 one-way, excluding checked baggage and food.
That said, Virgin Australia still has plenty of advantages. As well as an established frequent flyer program with millions of members, Virgin has a much larger domestic network. It also has international partner airlines which, when borders reopen, will feed Virgin’s flights (and vice versa).
Virgin’s other key advantage used to be its comprehensive domestic lounge network. With Virgin permanently closing half of its domestic lounges, that advantage has been squandered somewhat. But Virgin’s lounges are still far superior to Rex’s network of just three relatively small lounges in Sydney, Melbourne and Adelaide.
Rex is promising lounge access for all Business Class passengers up to 2 hours before departure. Rex is also selling lounge access to Economy class passengers for $33, or $16.50 for Economy passengers with Flex fares. That’s in addition to access for Rex Lounge and Priority Pass members. If Rex is successful in filling its jets, its lounges could quickly become overcrowded.
Regional connectivity
While Virgin & Qantas are able to offer international connections, Rex will soon be able to offer even more connections between Australia’s major cities and country towns. For example, Rex’s new Sydney-Melbourne service will significantly reduce travel times and increase the level of convenience for somebody wanting to travel from Sydney to Mt Gambier.
Even on regional routes where Rex is competing with Qantas, it seems to be undercutting Qantas on price. For example, Rex has fares from Melbourne to Armidale (via Sydney) available for $197.
Qantas is charging $264 for similar flights. However, Qantas has multiple daily frequencies whereas Rex can only offer this connection twice per week.
New Rex website
To coincide with the sale of Sydney-Melbourne flights, Rex has launched a brand new website. This wouldn’t ordinarily be big news, except that Rex hasn’t done this since 2005. Its old website, while functional, looked horrendous. The new website is a vast improvement!
Join the discussion on the Australian Frequent Flyer forum: Rex to fly between Australian capital cities
