Rex steps up challenge to airline majors with Etihad Airways partnership agreement

Regional Express Holdings (ASX: REX) has stepped up its campaign as a challenger to the Australian domestic airline duopoly after securing a new partnership agreement with Etihad Airways.

Rex Airlines says the new interline partnership with the United Arab Emirates’ national carrier provides passengers on Rex's domestic routes convenient connections with the global network of one of the world’s biggest airlines.

“Partnering with a world-class airline like Etihad brings a new era of choice and connection for Rex passengers,” says Rex’s general manager of network strategy Warrick Lodge.

“Passengers will be able to fly to either Sydney or Melbourne on Rex and thereafter connect on Etihad to a further 72 destinations across the globe.”

Lodge notes that Etihad's extensive international network includes Europe, Africa, the Middle East, Asia and the US.

“The entire journey, including Etihad and Rex connecting flights, can be booked under one booking and passengers can enjoy the convenience of through-check baggage (where permitted),” he says.

The Etihad partnership is the second interline agreement for Rex and follows a similar arrangement secured with Delta Air Lines in 2022.

Rex, Australia’s largest independent regional and domestic airline, has 10 domestic routes connecting capital cities and holiday destinations in five states.

"This exciting new partnership significantly expands connectivity options for Etihad guests, providing them with effortless access from our gateways in Sydney and Melbourne to pivotal destinations within the Rex network, including Adelaide, Hobart, Canberra, Brisbane, and the Gold Coast,” says Arik De, Etihad’s chief revenue and commercial officer.

“Equally, we are thrilled to extend a warm welcome to Rex customers, enabling them to seamlessly integrate into our expanding global network."

Rex operates a fleet of 57 Saab 340 and 10 Boeing 737-800NG aircraft to 56 destinations with the company’s operations including the Pel-Air Aviation division, which is an air freight, aeromedical and charter operator. Rex is also a 50 per cent shareholder of fly-in-fly-out, charter and freight operator National Jet Express.

The company reported a $3.2 million loss for the first half of FY24, down from a $16.5 million loss a year earlier.

In the aftermath of the pandemic, the airline has been attempting to gain market share from the Qantas Airways (ASX: QAN) and Virgin duopoly, particularly the lucrative capital city routes.

Rex deputy chairman John Sharp, when announcing the delivery of the company’s 10th Boeing 737-800NG in December, says the airline has been adding depth to its schedule by adding additional frequencies on its most popular routes while looking to add more capital cities to its network.