Regional Express has been on fire of late. They first acquired an entire fleet of Boeing 737 jets which were being leased to Virgin Australia and were based in Sydney and then announced they had ambitions to become national carrier number 3. They plan to do this by starting flights between the capital cities of Australia from March 2021. And want to launch specifically flights along the east coast, which in the past have been the most travelled routes in Australia.

But Rex has announced another part to their grand plan which puts them in a good position to compete with QANTAS and their subsidiary budget airline Jetstar. Rex has listed a frequent flyer program as one of their strategic milestones.

This was revealed in the same week Rex had been in negotiations with an Asian PE firm to capitalise a $150 million contribution to the ambitious network expansion. With the success of QANTAS’ Frequent Flyer program and Virgin’s Velocity programs both in added value to their networks and overall value each airline attributes to the programs in stand-alone form, the move makes sense.

Rex has targeted a $1.5 billion value of the frequent flyer program with an aggressive expansion looking towards a 3-4-year rollout. This means that Rex’s frequent flyer program will be three quarters the value of the Velocity program, a program that runs for almost two decades and considered the feather in Virgin Australia’s cap.

Launch and execution of the planned frequent flyer program are still ways off, though, with a launch being heavily reliant on the success of capital city routes and not planned until 2022. With that in mind though, if Rex does want to compete with QANTAS and Virgin in the long-term a frequent flyer program and partners that come with that program are crucial, with both of the aforementioned airlines garnering valuable company-wide partnerships with other organisations through the program.

Is there room for 3 national carriers though? It’s hard to say, we’re living in a different world to the failure of Ansett in the 90s and globalisation means that travel is more frequented and accepted in the day to day life of the consumer. The chances of success will depend largely on the tourism’s rebound from the COVID19 crash it’s experienced for months on end.