Losses narrow for Rex in FY2021, but forecasts challenging headwinds

Seth Jaworski

Australia’s Regional Express Airlines, better known as Rex, reported an annual before-tax loss of AUD 18.4 million ($13.5 million) narrowing from a before-tax loss of AUD 27.4 million ($20.1 million) in 2020. 

Rex said COVID-19 dominated the financial performance for the period ending June 30, 2021. 

“The airline industry has never been as badly ravaged in its entire history as today with a staggering drop of 56% in passenger numbers globally,”  Lim Kim Hai, executive chairman of Rex, said in a statement on August 31, 2021. 

“To understand the magnitude of the devastation, the drop in global passenger numbers was 16% during the Global Financial Crisis. Rex’s passenger numbers fell by 29% in the past full year.”

The group witnessed a reduction of 41.3% in  passenger revenue to AUD 125.2 million ($91.9 million) in 2021

The airline also reported a 20% decrease in total revenue to AUD 256.2 million ($188.6 million).

Due to ongoing difficulties in operations, the airline has decided to defer the Boeing 737 deliveries expected to take place by the end of September 2021, according to a report by the Sydney Morning Herald. The deliveries of the aircraft have reportedly been postponed to the middle of 2022.  

“We’ve always said that we’ll scale up and scale down according to the circumstance,” said John Sharp, Rex’s deputy chairman, to Sydney Morning Herald in a statement. “So we’ve delayed those [planes] until such time as things return to normal.”

The airline has suspended domestic services and reduced regional services until October 10, 2021, due to a lockdown imposed by the New South Wales government in Greater Sydney until the end of September 2021.

Rex predicted that the first half of the upcoming year will be dominated by internal border closures and lockdowns, as per the investor briefing report published by the airline. 

Kim Hai further added: “It is possible that the second half will be struck by further waves of infection given the experience of other highly-vaccinated countries. As such the outlook for the year is highly uncertain.”

The airline currently operates a fleet of 60 Saab 340s and Six Boeing 737-NGs.

AeroTime has reached out to Rex for comments.

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