Another Qantas rival fails, spurring calls to curb market grip

The collapse of another Australian airline — at least the fourth in as many years — highlights again the overwhelming local dominance of Qantas Airways Ltd. and increases pressure on the government to rein in the century-old giant. Rex, an established regional airline that recently tried to take on Qantas on busy and lucrative capital city routes, fell into administration late Tuesday. Regional Express Holdings Ltd., as the listed entity is known, canceled all flights between major airports and grounded its fleet of Boeing Co. 737 jets. Rex’s existential struggles, after two decades of regional operations, stem from its ill-fated expansion into major intercity services such as Sydney-Melbourne — one of the world’s busiest domestic routes — in 2021. Stymied by a crippling fare war with Qantas and Virgin Australia Airlines Pty, and insufficient slots at Sydney Airport, Rex bled cash and its market share wallowed at just 5%. Qantas and its budget brand Jetstar control 62% of the market, while Virgin has a 31% share, according to the latest data from Australia’s competition regulator. Rex appointed Ernst & Young as administrators, and its shares, which had fallen 35% this year, were indefinitely suspended from trading. The process of voluntary administration is designed to resolve a company’s future, either by securing a deal to save or sell the business or by achieving the best outcome for creditors. Rex’s fate reinforces the findings of a government review last year, which concluded Australian fliers were being short-changed by out-of-date and inadequate regulation. There was concern, the government said at the time, that major airlines were manipulating rules to hoard more airport slots than they needed in order to keep out smaller competitors. <br/>