The Regional Express Holdings Ltd (ASX: REX) share price has been a strong performer on Wednesday.
In morning trade the regional airline operator’s shares jumped as much as 10% to $2.07.
The Regional Express share price has since given back some of these gains but is still up 8% to $2.03 currently.
Why is the Regional Express share price soaring?
Investors have been buying the company’s shares this morning after it announced the receipt of the High Capacity Air Operator’s Certificate (HCAOC) by the Civil Aviation Safety Authority (CASA).
This means that the airline is now approved for Regular Public Transport services using the Boeing 737-800NG on its existing network where appropriate.
Why is this important?
With the HCAOC in hand and the airline able to fly its 737-800NG for Regular Public Transport services, Regional Express can now start preparing to compete with Qantas Airways Limited (ASX: QAN) and Virgin Australia on some of the busiest domestic travel routes.
The company is planning to commence domestic operations between Sydney and Melbourne from 1 March 2021 and thereafter to other major cities.
In preparation for this, it has launched a special promotion of 100,000 tickets offered at $79 on its nine daily return flights between Sydney and Melbourne.
There is expected to be some meaningful economic and traveller benefits from this development.
The company revealed that it hopes to be able to help in the national recovery effort by offering jobs to some of the thousands made redundant by other carriers during the pandemic.
Furthermore, it is looking forward to providing “domestic travellers with a safe and reliable yet affordable air service with its trademark country hospitality.”
Management spoke positively about the CASA team, acknowledging that it wouldn’t have been able to achieve this without its help.
Regional Express’ Executive Chairman, Lim Kim Hai, commented: “CASA’s commitment and dedication to the recovery effort during this period of national emergency is nothing short of outstanding and exemplary. Under the leadership of Shane Carmody and Craig Martin, CASA has gone above and beyond to ensure that the aviation industry is fully supported by the regulator in all aspects. CASA’s assistance was critical at a time when all airlines were fighting for survival.”
The good news for Qantas shareholders is that this news hasn’t put a dampener on its shares. The Qantas share price is up approximately 2% in morning trade.