Rex Letter to Committee Chair: Testimony Given at the Senate Enquiry

3 October 2023

Committee Chair

c/o Antony Paul, Principle Research Officer

Senate Select Committee on Commonwealth Bilateral Air Service Agreements

Via email:

Dear Committee Chair

TESTIMONY GIVEN AT THE SENATE ENQUIRY

As a publicly listed company, Rex has the obligation to set the record straight whenever lies, half-truths and misrepresentations are publicly made concerning it.

We are therefore calling out on the lies and half-truths made by the most senior representatives of the lying kangaroo in their testimony before the committee on the 27th September 2023.

1. "Qantas is the most reliable airline"

Qantas has repeatedly perpetuated this lie for over 6 months by both the former and current leadership. The fact of the matter is that in FY 23, Rex leads Qantas Group and the rest of the pack by a country mile for On Time Departures, and Qantas Group's cancellation rate is 100% higher than the

Rex's Group as the following table will show. This trend is confirmed by the latest results for the month of August 23 published by BITRE.

The Rex Group has as many flights as Jetstar and yet Qantas selectively ignores Rex's results when it does not suit its narrative.

	FY 23	AUG 23
	On Time	Cancellation	On Time	Cancellation
	Departures	Rates	Departures	Rates
Rex Group	74.7%	1.9%	80.0%	1.8%
Qantas Group	69.1%	4.3%	73.8%	3.7%
Virgin Group	67.4%	3.5%	68.8%	4.9%

1. "Rex has 108 slots at Sydney Airport and has all the slots it wanted"
   Rex has not been allocated all the slots it applied for and had to go through a lot of gymnastics to obtain the scraps of slots, most of which were salvaged from the international pool due to the foreign carriers not being at full force yet.
   Rex's 100 slots in the legislated peak hours of Sydney Airport means it has only
   20 peak slots a day (on weekdays) out of the 800 daily peak slots available, the equivalent of only 10 return trips out of Sydney.
   This explains why Rex has only two 737-800NG aircraft based in Sydney, of its 9 aircraft in total, and 5 aircraft based in Melbourne, when we should have at least 4 aircraft based in Sydney based on the commercial demand patterns.
   Qantas on the other hand blatantly games the system and squats on slots. By its own admission (see attached media release), Qantas is about at 90% pre- COVID capacity and yet squats on 110% of the pre-COVID allotment, thereby wasting 20% of the slots and illicitly preventing competition - both domestic and international. One does not need to be Einstein to understand why Qantas' cancellations in Sydney are through the roof and higher than its already-high national average.
2. "Fares have decreased since Qantas entered a route"
   Qantas would not have an idea of what were the average fares before their entry into a route and this is another myth that Qantas likes to propagate to justify its predatory behavior. Rex has close to 20 years of data on the average fares of most of the routes that Qantas entered in a predatory manner and we have concrete evidence that the average fares have gone up in almost all instances, some as much as 25-30%.
3. "ACCC did not find a shred of evidence of wrong doing with regard to Qantas anti-competitive behavior"
   This is a complete misrepresentation of the actual findings of the ACCC. The ACCC closed its investigation of Qantas because factors like COVID-19 complicated their investigation.
   The ACCC indicated, in its June 22 monitoring report, that a range of factors impacted the competitive dynamics of the market at the time, particularly COVID-19 restrictions and border closures. The ACCC also indicated that with a lessened COVID-19 impact it would now be simpler to evaluate the impact of any future capacity increases or pricing practices by airlines in response to competition. The ACCC also indicated that it would continue to pay close attention to Qantas.

Having the waters muddied by COVID-19 and not being confident of a criminal conviction in court is not the same as saying that there is not a single piece of evidence of wrong doing.

Yours Sincerely,

Neville Howell

Director and COO