Aviation

Rex signs letters of intent on six leased 737s for domestic routes

Regional Express’ ambitions of becoming a domestic route competitor are taking shape, with the carrier announcing it has signed letters of intent for six Boeing aircraft.

The leased 737-800 NGs were signed for with two lessors, with the first of the six aircraft to be delivered on 1 November 2020 and the remainder to be “phased in” over the next four months.

It comes after Rex in June revealed, rather controversially, that it intended to expand its services to include capital cities.

“The signing of these letters marks another significant milestone for our entry into the domestic jet market,” Rex deputy chairman John Sharp said.

“Our preparations are progressing very well and on schedule and we hope to obtain regulatory approval by December. Advanced ticket sales are also envisaged for December, subject to regulatory approval.”

Three of the aircraft will be deployed in the first phase of the launch of Rex’s domestic operations on 1 March 2021, on the Sydney to Melbourne route, with another two aircraft beginning service before Easter.

From there, Rex will continue to grow the domestic fleet in line with the return of passenger demand, with hopes to see its fleet of 737-800 NGs reach ten by end-2021.

It comes after Rex recently signed a long-form term sheet with the investment firm PAG Asia Capital to entirely fund its domestic jet operations.

The news also arrives as the Australian Competition and Consumer Commission (ACCC) prepares to monitor aviation competition between Qantas, Virgin and Rex over the next three years.

Specifically, the ACCC will be looking for capacity dumping, predatory pricing and hoarding or airport spots, as it keeps its eyes on “certain activities that may damage competition”.


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