Thursday, August 22, 2024 Australia’s air travel market is bracing for a significant shift as Rex Airlines, the regional carrier that entered the major-city market just three years ago, teeters on the edge of collapse. The Australian Competition and Consumer Commission (ACCC) has raised concerns that the departure of Rex from capital city routes could lead to a sharp increase in airfares, as competition dwindles and the market becomes more concentrated. Rex, formally known as Regional Express, made a bold move into the capital city market in 2021, shaking up Australia’s aviation industry.
Before Rex’s entry, the major city routes were dominated by Qantas, its subsidiary Jetstar , and Virgin Australia . The arrival of Rex provided a much-needed jolt of competition, driving down prices and giving travelers more choices. According to the ACCC, Rex’s presence on several intercity routes led to a significant reduction in airfares.
The watchdog reported that the average price per passenger dropped by around 25% on the routes where Rex operated. This competitive pressure forced the dominant airlines to lower their prices, benefiting consumers across the board. However, Rex’s venture into the metropolitan market has been short-lived.
The airline, already burdened by the challenges of the highly competitive aviation industry, was further strained by the economic fallout from the COVID-19 pandemic. On July 30, 2024, Rex appointed administrators from EY Australia as it struggl.