👉 Background: Regional Express Airlines, or Rex, started back in 2002 and originally focused on serving regional Australians through 45 regional routes. In December 2021, Rex entered the "Golden Triangle" - aka the route between Melbourne, Sydney and Brisbane. But by July this year, the golden triangle plan had failed and Rex entered voluntary administration after it couldn’t pay back its debts.

👉 What happened: Now, the federal government has promised to give $80 million to Rex to help it keep its regional routes running. It also means that Rex workers will be paid for the first time since July.

👉 What else: This is quite a convenient timing after the whole debacle of politicians getting preferential treatment on Qantas flights. But, ultimately this is about driving competition in a market where there is VERY high barriers to entry, and VERY low competition. Meaning, airlines can pick and choose their prices.

What's the key learning?

💡When competition goes on holiday, we see commercial airfares get a whole lot pricier. It's no coincidence that prices jump when a competitor leaves the market.

💡In the last 3 months since Rex left the domestic market, airfares on flights from cities - like Sydney, Melbourne, Brisbane have jumped more than 13%. While outside of capital cities, the flights were largely flat (despite a 41% drop in fuel costs).

💡With less seats on domestic flights across Australia, this has led to fuller flights, increased competition for seats and higher prices. Ultimately, the domestic airline industry has become even more concentrated - and this is exactly what the government wants to avoid.