Posted on: 01 September 2014 by Mark Howells
Regional Express Holdings (Rex), Australia’s largest independent regional airline, has reported a Profit Before Tax (PBT) of A$10.7 million for the full financial year (FY) ending 30 June 2014.
Rex’s PBT for FY 2014 is an improvement on its half year results, when the airline reported a reduction in PBT of 59.8%. However, the FY result still represents a drop of about 45% in comparison with 2013 figures.
Lim Kim Hai, Rex’s executive chairman, blamed the “prolonged and endemic crisis that is gripping Australian aviation”. He cited record average fuel prices and deterioration in the Australian economy, which “resulted in 38,000 fewer Rex passengers, or a reduction of 3.4%,” as some of the reasons for the airlines significant decline in performance.
Lim explained, "The environment is so toxic that incredible as it sounds, Rex is not only the most profitable passenger airline group for the third consecutive year, it has more accumulated PBT than Qantas or Virgin Australia over the last nine years."
“The burden of increased government taxes in the form of the carbon tax and a significant increase in the fuel levy to fund the Civil Aviation Safety Authority,” he continued, “just add more nails in the coffin of the aviation industry.”
In an appeal to the Abbott government, Lim called on it “to urgently start implementing the concrete initiatives promised in the Coalition’s Policy for Aviation issued in August 2013 prior to the federal election one year ago.” He went on to list 16 Australian regional airlines that collapsed in the last 15 years including Horizon Airlines, Emu Airways and Transair.
Lim stated that Rex’s survival is due to an investment of over $56 million. A similar investment was made by the airline during the global financial crisis of 2008. He concluded, “God willing, Rex will be able to weather this storm.”
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