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Rex opens Melbourne route after axing Kangaroo Island

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A week after axing its Adelaide to Kangaroo Island route, country airline Regional Express will soon launch Adelaide-Melbourne flights in a bid to challenge Qantas and Virgin Australia on more big-city routes.

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Rex will today begin offering Melbourne-Adelaide, Sydney-Gold Coast and Melbourne-Gold Coast routes from April 1.

The Melbourne-Adelaide route will be twice daily and start at $69 for economy class, according to Executive Traveller.

It comes a week after Rex cut its Adelaide to Kangaroo Island route, blaming the decision on “aggressive predatory moves” by rival Qantas in the regional market.

Rex’s first Melbourne-Sydney flights are also planned for Monday morning. Rex added the route, Australia’s most popular, late last year to muscle in on the capital city market that is dominated by Qantas and Virgin.

The regional airline had previously planned to launch Sydney-Brisbane flights next to add a second route that was highly popular with business travellers.

But it says it will instead launch the more leisure-oriented Adelaide and Gold Coast routes in time for the Easter long weekend in early April.

Rex, which until now operated only ageing 30- to 36-seat turboprops on routes like Sydney-Wagga Wagga, is using six leased Boeing 737-800s that used to fly with Virgin to take on the incumbent players.

Rex took advantage of the pandemic downturn to sign cut-rate leases and cheaper staff contracts than its rivals.

It raised up to $150 million from PAG Asia Capital to launch the operations, which Rex says if successful could expand to other routes and as many as 40 planes by 2022.

Before the pandemic, Qantas’ Sydney-Melbourne route was the second-biggest revenue generator for any airline globally, contributing $861 million in 2018.

But off-and-on state border closures due to the pandemic have dented traffic demand and passenger confidence.

Rex has already cancelled some of its initial flight frequencies despite having offered one-way economy class tickets from just $49, in a deal that Qantas then undercut with $29 fares on budget airline Jetstar.

Rex said on Friday its big-city operations were not expected to be profitable in the financial year ending June 30, although they could be in the following year if the domestic recovery is strong.

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