Regional Express (REX) and Virgin Australia have an interline agreement of sorts. If you check your bag in for a REX flight or a Virgin flight and are transferring to the other airline at one of six airports (Adelaide, Melbourne, Sydney, Brisbane, Cairns and Perth) your bags can be check through to the final destination.
It’s far from a perfect arrangement. Neither airline will issue boarding passes to your final destination and you can’t use web check-in. If, in a busy airport like T2 in Sydney you have to schlep back to the landside departures area to check back in, it kind of defeats the purpose.
In addition, anecdotal feedback suggests staff at both airlines are not familiar with the interline agreement and often knock back requests to check bags through to the final destination.
But what if REX and Virgin Australia built on this admittedly shaky interline agreement
They could, as a beginning, start issuing boarding passes all the way through to the final destination at the initial check in point.
Virgin could upgrade its IT to allow web check in and self serve check in at the kiosks.
The airline’s booking engines could be updated to allow through bookings.
The above improvements would require an upgrade of Virgin and REX’s IT. Virgin’s current IT is woeful so successfully doing the above could be a big ask.
REX doesn’t really have a frequent flyer program but could there be scope to allow Velocity members to redeem flights on REX?
REX could shut its pretty average lounges in Sydney, Melbourne, and Adelaide and send its REX Lounge members to the Virgin Lounges. Alternatively, a reciprocal lounge agreement could see eligible Virgin passengers use the REX lounges when flying out on REX. If REX shut its lounges, the biggest blow would be to Priority PaREXss members.
Finally, they could stop duplicating services on routes like Sydney-Wagga-Sydney, Sydney-Albury-Sydney, and Melbourne-Mildura-Melbourne. These regional flights are under threat by Virgin’s route review. REX has expertise as a country commuter airline and more size appropriate aircraft. Leaving the route to them whilst being able to funnel passengers onto the route and accept passengers off that route makes sense.
Both airlines would benefit from feeding passengers to one another. But whilst Virgin Australia loses money, REX makes money. Would REX want to tie its fortunes to a partner who is underperforming?