Rex - Regional Express (ZL, Wagga Wagga) has raised an official complaint with the Australian Competition and Consumer Commission (ACCC) about Qantas's alleged dumping of excess capacity on routes that are already financially marginal. The regional carrier said in a statement that as a result, it will exit the Sydney Kingsford Smith to Ballina route and the Adelaide to Kingscote city pairs in the coming weeks.

"This is not a decision that Rex has taken lightly having serviced Kangaroo Island continuously for 30 years and Ballina for 24 years, first as Kendell Airlines and then as Rex since 2002." It added that it was "not able to match Qantas’s financial firepower" and "is not able to continue servicing a money-losing route indefinitely."

Rex broke down its complaint as follows:

  • Sydney-Ballina: Last month, Qantas announced it would add daily flights on the route from March 29, providing an additional 36,000 annual seats. According to the ch-aviation schedules product, Rex operates 6x weekly on the sector - other carriers also flying on the route include Virgin Australia (VA, Brisbane Int'l) (2x daily) and Qantas' low-cost carrier (LCC) subsidiary Jetstar Airways (JQ, Melbourne Tullamarine) (3x daily);
  • Adelaide-Kangaroo Island (Kingscote): In December 2017, Qantas commenced services on the route adding in 6,200 seats between December 2017 and February 2018. Also, Qantas commenced direct services to Melbourne, further diluting the passengers travelling on Rex since they no longer need to travel to Adelaide to fly to Melbourne. Rex presently offers a 2x daily service on the city pair and Qantas flies 5x weekly;
  • Adelaide-Whyalla: In April 2015, Qantas commenced services on the route by adding 66,000 annual seats to the market. Rex currently flies 22x weekly on the 124-nautical mile (229-kilometre) route, whereas Qantas offers a 15x weekly service.

"The direct impact of this conduct is to force out the smaller competitor and substantially lessen competition in the long term," Rex underscored. "It is obvious that the excessive additional capacity introduced by Qantas on these routes kills the ability for Rex to offer a sustainable alternative to the Qantas model for regional communities and increases Qantas’ market power."

Rex is Australia’s largest independent regional airline operating a fleet of fifty-seven Saab turboprops - one Saab 340A, thirty Saab 340Bs, and twenty-six Saab 340B(Plus) - on around 1,500 weekly flights to 60 destinations throughout all states in Australia.