Regional Express (Rex) is banking on a much swifter return of regional flying than domestic or international, after the airline posted a $19.4 million full-year loss.
The loss was attributed to a $62 million impairment booked by Rex in anticipation of difficult trading conditions over the next two years due to COVID-19.
However, the blow was softened by Commonwealth grants that were provided to all regional carriers to assist with financial liquidity. Rex booked in $62.1 million of these government grants in FY20, which included the JobKeeper subsidy.
Rex executive chairman Lim Kim Hai said the airline was “brought to its knees” by COVID-19, with passenger numbers plummeting 90 per cent between 15 and 28 March 2020, and passenger revenue falling by $65 million in the last quarter of FY20.
But, thanks in large part to the government handouts, Rex still managed to grow total revenue by one per cent to $321.8 million during the last financial year.
Lim thanked the government and Deputy Prime Minister Michael McCormack for their “swift and decisive actions that have saved Australia’s regional aviation industry”.
“If they were to lose their essential air services, remote and regional communities would have been dealt another mortal blow following the devastating effects of drought, bushfires, floods, and now the pandemic,” he said.
Rex’s chairman also promised that the airline would give back to the community in the future “when it is strong again”.
“Rex believes that regional aviation will recover much sooner than the domestic or international sectors and, barring further waves of outbreak, Rex sees regional aviation returning to normalcy within two years,” he said.
“In relation to our recently announced plans to commence domestic jet operations in March 2021, we are excited at this next big chapter in Rex’s history and we see this as our way of paying back to the community.
“We believe that Australia deserves an alternative domestic carrier that is safe, reliable, convenient, and affordable and, most importantly, one that can go the distance against the Qantas Group.”
Rex expects its domestic operations will be funded by either a sale-and-lease-back of aircraft within the existing Saab fleet or by other interested parties.
“Discussions with interested parties are continuing, but are not yet finalised,” Lim said.
Featured image source: iStock/Ryan Fletcher