Air Freight News

Qantas-challenger Rex plans fleet surge as bookings pick up

Australian airline Rex laid out ambitious plans to increase the number of jets taking on Qantas Airways Ltd. on the country’s busiest routes, saying the worst of the fallout from the pandemic appears to be over.

Regional Express Holdings Ltd., as the airline is officially called, last year started a domestic business flying popular legs including Melbourne-Sydney and Melbourne-Adelaide that have long been dominated by Qantas. In an interview, Rex Chairman Lim Kim Hai said he plans to expand the company’s fleet of six Boeing Co. 737s to as many as 30 by adding a plane every two to three months.

“That’s a very good medium-term objective,” Lim said at the Singapore Airshow. “There’s a lot to be said for economies of scale.” 

Lim owns about 20% of Rex.

Rex is best known for serving rural Australian towns with propeller planes on routes where there’s less competition. Adding more Boeing jets would be doubling down on a new domestic business that has at times struggled in a price war with Qantas, its low-cost arm Jetstar, and Bain Capital-owned Virgin Australia.

Rex was also hammered by a fresh wave of travel restrictions last year when the omicron variant arrived in Australia.

“It has not been easy,” Lim said, referring to the new domestic venture rather than Rex’s established rural business. No airline makes money when planes are half full, he said.

Recent bookings across the Rex network point to a recovery, Lim said.

“I’m just starting to see in the last six or seven days a turnaround,” he said. “Significant enough for me to believe that probably the bottom has been reached.”

While the increase in demand is not yet enough to make all flights profitable, Lim said it “gives us some encouragement.”

“You just hope that you ride out the bleed and be there when you recover,” he said.

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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