Australian aviation: Rex looks to drop jet operation; part two – market implications

The likely demise of Rex's narrowbody jet operation will obviously have a big impact on the carrier's capacity, but the broader effect on the market will be somewhat limited as it was not large enough to become a major player on most of its jet routes.

The Australian carrier entered voluntary administration on 30-Jul-2024, and shut down its narrowbody network. The airline is still operating its regional network, however.

Part one of this analysis looked at the development and aims of Rex's narrowbody fleet, beginning in Feb-2021 when the operation was launched.

Part two examines the implications of the withdrawal of Rex from the domestic trunk routes served by its narrowbodies.

Cutting the 737 routes has immediately reduced Rex's capacity by about 60%, and halved its domestic market share.

However, its exit from the trunk routes has had a much smaller effect on overall market dynamics.

Rex was generally the fourth-largest operator on these routes, and its market share was in single digits on most of them. Its withdrawal only boosted the market share of the larger carriers by five points or less.

But while ending the jet operation has a minimal effect on capacity, it has larger significance for competition, as it means one less fare competitor in the markets Rex served.