REX Increases Fares As Fuel Prices Soar

Given the quick rise in fuel prices, Rex says it had no choice but to raise its rates by at least $10 as rising fuel prices sent operational costs into the sky.

The regional carrier announced on Tuesday that it would raise fares across its regional and domestic networks by $10 — and even more in some lower-priced promotional airfares to absorb the fuel price increase.

Warrick Lodge, the company’s general manager of network planning, stated that the adjustments would take effect on Friday.

It will be the first time that Rex has raised its fares in more than three years.

“With fuel prices rising by more than 30% in recent weeks and supply chains being significantly impacted,” Mr Lodge added, “the current ticket pricing is no longer tenable.”

Australians have been slugged at the pump in recent weeks as gas remains above $2.20 per litre amid a worldwide oil price spike, with airlines no doubt feeling the pain.

The conflict in Ukraine and the sanctions imposed on oil-rich Russia have exacerbated an already strained supply chain, putting a premium on fuel.

Airlines like Rex have already emerged from a difficult two-year period in which Covid restrictions effectively immobilized the business.

In late 2020, Deputy Prime Minister Michael McCormack delivered Rex a $67.7 million funding package that included $54 million in cash, effectively saving it from bankruptcy.

Meanwhile, the competition watchdog and major airlines such as Qantas have already warned consumers that higher airfares are on the way as the oil price continues to hinder the sector’s recovery from the pandemic.

Mr Lodge stated that the new Rex rates were still “very reasonable,” with Sydney-Melbourne and Sydney-Brisbane flights beginning at $109.

“Rex’s Business class starts at $299 and is frequently even cheaper than Qantas’ economy class, which may easily reach $500, particularly during periods when Rex is not directly competing,” he said.

“We will be bringing in other planes soon, and more major Australian cities will be able to benefit from Rex’s dependable and affordable air travel.”

Rex serves 62 Australian destinations with a fleet of 60 Saab 340 and six Boeing 737-800 NG aircraft.

Last year, it added a Brisbane-Sydney flight to compete with Qantas and Virgin, establishing a Golden Triangle service covering Melbourne.

The corporation lost $36.7 million in the first half of the fiscal year 2022 after making $9.9 million in the same period the previous year.

The airline’s loss would have been more significant if not for $16 million in tax benefits and $28m in government grants and subsidies.