Australian Carrier REX To Take Additional 737; Optimistic For Domestic Market Growth

A Rex Airlines Boeing 737 lands at Canberra.
Photo Credit: Robert Myers CC BY-SA 3.0 via Wikimedia Commons

LONDON – Australia’s domestic and regional airline REX signs an LOI (Letter of Intent) for an additional Boeing 737-800 as the airline expresses its optimism for the Australian domestic market. 

LOI Shows positive signs of growth in the domestic market

John Sharp Rex’s Deputy Chairman said: “With the full reopening of borders, Rex will continue to expand its domestic fleet and will look at introducing new aircraft whenever these become available for lease at favourable terms.” This has caused confidence in the domestic market. 

The airline hasn’t released the date of the additional aircraft joining the family but will be introduced once the aircraft has undergone necessary checks. 

Besides signing an additional LOI for a new Boeing, the airline also partnered up with U.S carrier Delta Airlines earlier this month. The airline had also an LOI signed with Delta Air Lines venturing into a  commercial agreement that fosters a closer relationship between the two carriers, by having an interline ticketing and baggage services to each other starting in the third quarter of this year. This could be one of the leading reasons why Rex may have considered an additional Boeing 737. 

This means that after the delivery of the new additional 737, this will raise the total of the aircraft to 67 aircraft. The fleet currently consists of 60 Swedish-built Saab 340s and six Boeing 737-800NG. 

Rex is Australia’s largest independent regional and domestic airline operating to unserved airports or destinations throughout Australia giving it an advantage in pricing and brand image on some routes untapped by rival Qantas and Virgin Australia. Rex Airlines flies to 62 destinations across Australia. 

Who is REX Airlines?

The airline is owned by Rex Group. Rex Group in addition to the airline Rex, Rex Group consists of smaller daughter companies, such as the subsidiaries Pel-Air Aviation (air freight, medevac, and charter operator) and the two flying schools, Australian Airline Pilot Academy in Wagga Wagga and Ballarat.

The one additional 737 may be small for us readers or for other airlines. For Rex and the context of the Australian industry is large and significant. The additional 737 is a signal for recovery and resilience in the Australian domestic market.

Moreover, this places the airline in a better state to go against competition against Qantas and Virgin Atlantic, where they have a more traditional hub and spoke model out of respective large Australian airports, like Sydney, Melbourne and Brisbane. Rex’s business plan is very strategic and indirectly competes with the traditional carriers. Its Niche point to point routing gives the airline advantage in pricing and provides first movers advantage for passengers living in regional and lesser-known airports. 

The interlining agreement with Delta Air Lines also means more convenience for passengers connecting between Australia and the United States, sparks further optimism and therefore justification for the airline to expand. 

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