Rex expands flight offering on nine regional routes

Regional flight operator Rex (ASX: REX) is responding to Qantas' (ASX: QAN) increased flight offering with daily weekday flights on six routes, as well as more services on another three.

The announcement on Friday relates to flights where Qantas is in competition with Rex and is doubling its number of flights.

"From 6 July 2020, Rex will be providing daily weekday return services to these competitive routes and will also provide twice-daily return services on certain days in order to facilitate day-return travel," Rex said.

Rex will offer daily return flights every weekday for Sydney to Albury, Wagga Wagga and Orange; Melbourne to Mildura; and Adelaide to Whyalla and Port Lincoln.

The airline will offer return flights four days a week from Sydney to Dubbo, three days Sydney to Ballina, and two days Adelaide to Kangaroo Island.

Rex was rescued from COVID-19 uncertainty at the end of March when the Federal Government announced a $198 million Regional Air Network Support (RANS) program.

"Given that Rex and QantasLink together operate approximately 80 per cent of all eligible regional services, both carriers will, over the six-month period, be expected to receive proportionately 80 per cent of the grant amount," Rex reported in a clarification note on 4 June.

The company has also explained the Qantas and Virgin were excluded from the $100 million Regional Airlines Funding Assistance (RAFA) program, so it is a possibility that Rex will receive the majority of that amount given its network accounts for more than 60 per cent of all regional services excluding the two large players.

Rex however does not expect to see much of the $715 million Australian Airline Financial Relief Package (AAFR).

"A large portion of these funds will be directed to Airservices Australia. Of the remaining funds that will go to the airlines over 90 per cent will go to the Qantas and Virgin Australia Groups," the airline said.

"It is clear for all to see that Qantas and Virgin Australia will receive the lion's share of the $1.2 billion grants available, exceeding what Rex will receive by many fold.

"The Federal Government has justifiably placed regional aviation as a national priority and has provided appropriate assistance to ensure that regional communities will retain their vital air services after the COVID-19 crisis is over."

In May the company confirmed it had been approached by several parties interested in providing around $200 million worth of equity required to start domestic operations in Australia.

The company has also reached various funding arrangements with state governments as well to reactivate 88 return service flights since late April.

Updated at 10:25am AEST on 8 June 2020.