Australia’s Regional Express says could operate 30 or 40 jets by 2022

(Reuters) – Regional Express Holdings Ltd (Rex) REX.AX aims to have around 30 or 40 narrowbody jets operating on domestic routes in Australia by the end of 2022 if its expansion to major cities is a success, the airline’s deputy chairman said on Wednesday.

The regional carrier has so far announced plans to lease an initial six Boeing Co BA.N 737 planes to compete against Qantas Airways Ltd QAN.AX and Virgin Australia Holdings Ltd VAH.AX on routes like Sydney-Melbourne from March.

“By the end of 2022… Rex’s ambition is to be a sizeable domestic airline operator with a fleet of 30 or maybe 40, maybe even more narrowbodied single-aisle aircraft operating on the domestic network around Australia,” Rex Deputy Chairman John Sharp said at a CAPA Centre for Aviation event.

As coronavirus infections have slowed, the border between New South Wales and Victoria will reopen from Nov. 23, leading airlines to add more flights between the country’s two most populous cities.

Rex Chairman Lim Kim Hai said the airline would start with nine daily return flights between Sydney and Melbourne with tickets priced around the same levels as Qantas low-cost offshoot Jetstar.

If the plan proved successful, it could add another aircraft each month or every six weeks from next July, he said.

The big city expansion by Rex, until now an operator of ageing 30-36 seat turboprops on regional routes, is a rare example of an airline expanding into new markets as the pandemic cripples air travel.

The downturn has enabled it to lease planes at reasonable rates and hire experienced staff at low prices, but it will face stiff competition from Qantas and Virgin.

Those well-established brands have strong loyalty programmes, more frequent flights and fancier airport lounges, and will scramble to win back share as demand recovers, according to analysts.