Qantas' "aggressive" expansion could squeeze regional services out of the market, Rex claims

Picture: Simon Sturzaker
Picture: Simon Sturzaker

Qantas is set to swoop in on regional Australia, using government subsidies to flood the domestic airline market and squeeze out its smaller, "weaker" competitors.

That is according to regional airline Rex, which has accused Qantas of "attacking (Rex's) profitable regional operations even at the cost of heavy losses for itself".

The claims follow Qantas' announcement on Friday of a major expansion to its regional network, including seven new routes across regional Australia and 400 extra seats a week on its Launceston-Melbourne flights.

"Rex believes these actions are clearly anti-competitive and particularly unconscionable at a time when Qantas is receiving almost one billion dollars of Federal assistance, while laying off thousands of workers under the pretext of reducing losses," a Rex spokesperson said.

"Rex calls on the Federal Government to cease all grants to Qantas if it persists with this opportunistic behaviour."

They said the permanent loss of regional airlines would leave rural and regional communities to suffer the consequences.

"(The government) should be aware that Qantas' actions will have a long-term negative impact on regional aviation," the spokesperson said.

"Qantas is well known for quickly dropping a route once it no longer serves its strategic objectives. If Qantas succeeds in driving Rex away from these routes, there is every possibility they will never have a regional service again when they are no longer relevant to Qantas."

QantasLink CEO John Gissing said the expansion was an opportunity to drive tourism and economic recovery in regional areas.

"As the national carrier, we have an important role to play in driving tourism and supporting the industry's recovery," said Mr Gissing.

"Before COVID, more than 11 million Australians travelled overseas each year, so these flights will help convert some of these international trips into domestic holidays instead.

"We're also pleased to be able to offer locals more choice and competitive fares on these routes, most of which have been monopolies for years."

IN OTHER NEWS:

Qantas has announced or commenced flying on 13 new routes across Australia since domestic border restrictions started to ease in July. Friday's announcement brings that number to 20.

Mr Gidding said Qantas was working to get as many aircraft back in the air as it could because "it's better for our business, our customers and gets more of our people back to work".

Qantas has been contacted for further comment.

This story Qantas' "aggressive" expansion could destroy regional services, airline claims first appeared on The Advocate.