Virgin sees tough profit outlook with Rex entry

SYDNEY: Virgin Australia expects the profit outlook for the Sydney-Melbourne-Brisbane triangle will be challenging for a long time as Regional Express Holdings Ltd (Rex) enters the market, Virgin’s chief executive said.

Rex plans to launch Sydney-Melbourne flights in March in a challenge to Qantas Airways Ltd and Virgin and has begun selling seats for as little as A$79 (US$58.70) each way to gain customers by undercutting its rivals. The so-called “golden triangle” of the Sydney-Melbourne, Sydney-Brisbane and Brisbane-Melbourne routes normally accounts for 40% of domestic aviation traffic.