Rex chief John Sharp says bush benefits from intercity jet services

In fact, while Rex's goal is to have at least 10 Boeing 737-800 jets flying between five state capitals, it says regional fares won't rise and will actually be much cheaper for the many country passengers likely to use its interstate flights.

Rex also plans to beef up its trademark Saab 340 turboprop services to regional ports in NSW, Victoria and Western Australia next year.

New routes to Coffs Harbour, Port Macquarie, and Tamworth, and Geraldton in WA are on the drawing board, as are extra services to Albury and Mildura on the NSW-Victorian border.

The 18-year-old carrier, which emerged from the ashes of the 2001 Ansett collapse to service a host of mainstream and remote regional airports from Burketown and Winton in Queensland, to Coober Pedy in South Australia and King Island in Bass Strait, insists jet services will be a win-win for city and country passengers.

The bigger business model will see the airline growing its largely regional-based workforce, too.

"Regional travellers will get a much better deal, and inter-city passengers get a full service offering at a budget airline price," said deputy chairman, John Sharp.

Rex's track record of prudent, debt-free cost control and its low business cost base, plus economies of scale associated with operating a bigger fleet, would continue underpinning profitability to ensure it was a savvy competitor.

"There'll be greater bargaining power for fuel or insurance and we can make better use of our regional business' platform at city airports - the infrastructure, equipment, staffing, booking networks, and so on," he said.

"We can do it (intercity services) because we're a conservative, well managed airline.

"We're consistently profitable, our wage structure is careful, and we certainly don't pay executives millions of dollars.

"The board chairman (Singaporean businessman Lim Kim Hai) didn't even take payment for the first 10 years of the company's life."

Rex starts flying the busy Sydney-Melbourne corridor on March 1, already making clear its competitive intentions with a $79 for one-way fare offer for the first 1000 seats booked, and a promise of regular business class seats for $299.

That's about half the fare charged by its rivals.

Flights between Brisbane, Sydney and Melbourne begin after Easter, with longer term plans afoot for Adelaide, then Perth.

Intercity services were also good news for country passengers, said Mr Sharp, promising better value on connecting flights and more efficient travel times between regional airports and interstate capitals.

"A fairly large number of our regional travellers already fly to Melbourne, Sydney or Brisbane via connecting flights with other carriers, but they can now access much cheaper combined fares," he said.

"It will be easier, too. Just one baggage check-in at Bathurst or Armidale and no more changing airport lounges in Sydney to catch a different airline flight to Melbourne."

Rex would also adjust schedules to better synchronise regional flights into Sydney and Melbourne with up to nine return 737 jet services each day.

Given many of its passengers already flew regularly to capital cities for medical commitments, business and government work, or city travellers had rural work commitments, the airline estimated a third of its fares were people currently forced to switch to Virgin Australia, Qantas or Jetstar flights to make trips interstate.

"All of those people, and many others, will soon find it much simpler, and their fares much more competitive if they book the whole way with Rex," he said.

The first six of Regional Express' Boeing 737s have begun coming out of mothballs to be prepped and repainted after previously being leased to Virgin Australia.

One is tipped to become the airline's new flagship, bearing the registration VH-REX.

Many new pilots, flight crew and ground staff will also be ex-Virgin employees, plus recruits from Qantas/Jetstar who lost jobs in the coronavirus shutdown.

The new year will eventually see about 400 new extra staff signed up to help Rex's capital city push, including recruits to its regional NSW-based customer service centre in Orange.

The call centre will double its numbers to about 40.

"Ours is a regional development story - our heart really is in the country," said Mr Sharp, noting most Rex executives came from, or still lived in, regional Australia, himself included.

"Pre-COVID our workforce totalled about 1150, and a majority of those jobs are in the bush at small centres or regional cities like Wagga where we have an engineering base and a pilot training academy.

"And, unlike Qantas or Virgin, we have not made any of our employees redundant."

However, given coronavirus grounded more than 95pc of Australian passenger aircraft during 2020, and many of its bread and butter regional routes remained on subsidised or reduced schedules, Rex's bold decision to push into the "golden triangle" Sydney-Brisbane-Melbourne market has been viewed by many industry observers as particularly courageous.

There are concerns the move puts at risk the bush airline's entire service to about 60 destinations across all states.

Those concerns have been amplified in the past week with Qantas launching its own push for extra passengers within Australia including more flights on some existing routes and seven new services to regional airports such as Mildura, Mount Gambia, Merimbula and Kangaroo Island.

Rex has accused QantasLink of deliberately flooding the market with additional excess capacity to eliminate weaker regional players, which may devastate regional aviation in the longer term.

The Australian Competition and Consumer Commission warned it was watching for evidence of "capacity dumping", which Rex argued Qantas was attempting, assisted by taxpayer-funded relief which was meant to help it cope with low passenger numbers during the pandemic.

Although Rex wanted all government grants to Qantas terminated "if it persists with this opportunistic behaviour", Mr Sharp admitted his company's underlying regional market had always been tough and competition "brisk".

However, the pandemic-battered market had improved with rising tourism-related traffic, particularly in WA and Queensland, and regional services continued to be well supported by "a generally more reliable passenger base" - rural people who must fly for business or essential services.

Despite the risks associated with antagonising national carrier Qantas, a long-time dominant incumbent on the capital city routes, or newly-streamlined and private equity-owned, Virgin, Mr Sharp remained confident Rex's new intercity schedules would be profitable and would grow, judiciously.

"Our roots and experience in the airline business go back to 1953 when Max Hazelton started (Hazelton Airlines), and Don Kendall in the 1960s," he said.

"We've got a good idea about what's achievable.

"We've already been competing with Qantas on regional routes for a hell of a long time, and we're not not frightened by a new challenge."

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