Regional Express (Rex) today announced it will cease operating services from Canberra to Sydney from Wednesday, 29 December 2004 following a lengthy review of the route’s viability.

Managing Director Geoff Breust said that the decision to withdraw was an agonising one as Rex was well aware of its social responsibility in maintaining competition in the prime Sydney-Canberra route.

Mr Breust said there were two core reasons for the massive $9m loss incurred on this route since beginning in August 2002 - the dominance of Qantas Business Travel (QBT) in government bookings and the cost of using Canberra Airport.

“Rex fares are usually cheaper but to expect QBT to apply the best fare of the day policy and direct passengers to any airline other than Qantas is like hoping the fox will guard the chicken coop,” Mr Breust said.

“Like many others, I fail to see how QBT remains as travel manager for most of the Government departments when there is a clear conflict of interest with their parent company.

“Yet this situation has remained pretty much unchanged in the 3 years since Ansett and its travel arm collapsed and QBT took over as travel manager.

“Our withdrawal together with that of Virgin Blue a few months ago clearly demonstrates the impact this unusual arrangement has on competition. Rex has demonstrated that in all cases where the playing field is level it can successfully compete. However in this case the stranglehold of QBT makes the playing field far from level.”

Mr Breust added that another reason for the withdrawal was the high infrastructure cost of operating the Canberra-Sydney route. Last year alone, Rex paid $2.8m in air navigation, airport charges, fees and leases at Canberra Airport to fly 65,000 passengers on the route.

Mr Breust said that arrangements are being made to accommodate passengers booked to travel after 29 December and Rex travel consultants are on standby at 13 17 13 to help with the travel arrangements of all those affected.

“I would like to take this opportunity to thank all those who have supported Rex loyally in the past two and a half years especially the Federal and ACT Governments who have made numerous attempts in reminding the public service to abide by the best fare of the day policy.”

Mr Breust predicted that fare prices on the Canberra-Sydney route will rise if the situation prior to Rex’s entry is anything to go by.

“To all those outraged by this situation, I do make this promise that we will return when the right operating conditions are put in place.”

Mr Breust paid tribute to the 10 Canberra-based Rex staff thanking them for their total professionalism, exemplary service standard and unabiding loyalty to the airline and customers. All staff have been offered either redeployment within the Company’s other operations or to receive their full entitlements.

• Rex has sustained $9.12m in losses on the Canberra to Sydney route since beginning in August 2002


• Dominance of Qantas Business Travel in government bookings


• The carriage of only 65,000 of the 832,000 passengers who fly on the route each year or 7.8% of the market


• Significant cost associated with using Canberra Airport including a total of $2.8m in air navigation, airport charges, fees and leases
  


• The last flight will be ZL382 on Tuesday 28 December 2004 at 6.45pm out of Canberra

• Arrangements are being made for an estimated 1,000 passengers booked to travel from 29 December 2004


• Passengers booked to travel on or after this date should contact the Rex Customer Call Centre on 13 17 13


• Arrangements are also being made to accommodate Canberra-based passengers who hold Rex Flyer or Rex Lounge memberships

If you are Canberra based and hold either a Rex Flyer or Rex Lounge Membership, you may be eligible for a refund.

All members please fill out your details on the appropriate form below and fax through to 02 6393 5598 :-

• Rex Flyer Refund Form
  
  
• Rex Lounge Refund Form
  

• Arrangements are being made for our ten in total full time, part time and casual staff at Canberra Airport to be offered either redeployment within the Company’s other operations or to receive their full entitlements
  

• Agents are advised not to make alternative arrangements directly with Qantas. To ensure that all Rex Customers are processed correctly, Agents must contact the Rex Customer Contact Centre on 13 17 13. Qantas are unable to accept any bookings that are not processed within the guidelines of the specific arrangements that have been put in place between Rex and Qantas. Please be aware that customers may be denied boarding if the correct procedures are not adhered to.