Australia's Rex signs deals to lease six 737 planes for planned Sydney-Melbourne route

SYDNEY, Sept 30 (Reuters) - Regional Express Ltd (Rex) said on Wednesday it had signed provisional deals with two lessors for six Boeing Co 737 planes as part of its plan to expand beyond regional flights to launch jet services between major Australian cities.

The flights would compete against those offered by the country’s dominant airlines, Qantas Airways Ltd and Virgin Australia Holdings Ltd, from March 1, 2021 at a time when they are struggling financially due to the COVID-19 pandemic.

Rex Deputy Chairman John Sharp said in a statement the airline planned for three of the jets to be deployed on the Sydney-Melbourne route from March, with another two entering service by Easter.

“From there, Rex will continue to grow the domestic fleet in line with the return of passenger demand and hopes to see its fleet of 737-800 NGs to reach 10 by year end,” he said.

Rex last week said it was in advanced talks with Asian investment firm PAG Asia Capital for up to A$150 million ($106.71 million) of funding for the jet services.

It would be a major expansion for Rex, which currently operates on less competitive regional routes like Sydney to Wagga Wagga and Adelaide to Port Lincoln using a fleet of ageing Saab 340 turboprops with 30 to 36 seats.

$1 = 1.4057 Australian dollars Reporting by Jamie Freed; Editing by Rashmi Aich