The decision by Regional Express Holdings - otherwise known as Rex - to enter voluntary administration once again underlines how difficult it is for a small-scale jet operation to compete against the established players in the Australian domestic market.
Rex is primarily a turboprop operator, but made a foray into narrowbody jet services in the wake of the COVID-19 pandemic. It appears that this jet operation will become a casualty of the restructuring during administration, although the more well-established regional operation will likely remain in place.
If this is what transpires, it would represent the second relatively new jet operation to fail in the Australian domestic market this year, after Bonza folded its service in Apr-2024.
While there are some differences between the Rex and Bonza examples, there are also notable similarities.
From a network perspective, the demise of Rex will not cause much difference in overall capacity or route coverage, although it will reduce price competition on the routes it served.
The first part of this analysis focuses on Rex's entry into voluntary administration, and examines how the airline's jet fleet build-up compared to its initial aspirations.
The second part will look at the network and market implications of Rex's exit from domestic trunk routes.
