Qantas boss predicts airline "fight to the death"

Keep a close watch on your frequent flyer points. 

Qantas boss Alan Joyce made a grim prediction for Australia’s domestic aviation sector following news that Regional Express (Rex) would be launching flights between Sydney and Melbourne from March.

Speaking at an online event hosted by international news agency Reuters, Joyce said that adding a fourth competitor to a route already serviced by Qantas, its offshoot Jetstar and Virgin Australia would spark fierce competition – and that one airline will not survive post-pandemic.

“My personal view is that this market has never sustained three airline groups and it probably won’t into the future,” Joyce said

“You can be guaranteed that Qantas will be one of them – it’s who else is going to be in the marketplace post this and into the future [that] is going to be interesting.”

Rex, Australia’s largest independent regional airline born from the ashes of Ansett over 20 years ago, announced last June a plan to service the “Golden Triangle” of Sydney-Melbourne-Brisbane.

In December, the Civil Aviation Safety Authority issued Rex a high-capacity air operator’s certificate, allowing it to use the Boeing 737-800NG, of which the airline has leased six.

Each aircraft will seat up to 176 people – a huge leap from the 36-seater Saab 340s Rex usually operates.

“The way is now clear for Rex to commence domestic operations between Sydney and Melbourne from March 1, 2021, and thereafter to other major cities,” the company announced late last year.

“Travellers for the first time do not have to choose between cheap fares with minimal service, or more reliable service with premium pricing.”

The Australian domestic aviation market has been stifled by ongoing border closures between states and territories. 

Virgin Australia went into voluntary administration in 2020 but was subsequently acquired by Bain Capital with with the re-organisation and change of ownership completed in November last year. 

Qantas has predicted its domestic flying capacity will return to 80%t of pre-Covid levels in the first three months of 2021. But the latest round of border restrictions will set the airline’s recovery back significantly.