Regional Express (Rex) has started off the 2020 financial year with an expected double-digit decline in profit due to the US-China trade war, several natural disasters, and a “very weak” Aussie dollar.
The airline posted a net profit after tax of $6.9 million for the six months to 31 December 2019 – down 29.6 per cent from the $9.8 million profit it achieved in the prior corresponding period.
Overall revenue rose 1.5 per cent to $166.2 million, but passenger revenue fell 0.2 per cent to $145.1 million.
A total of 659,053 passengers flew with Rex in the first half of 2020 – down 0.9 per cent on the first half of FY19.
The dour bottom-line result was foreshadowed during Rex’s annual general meeting back in November 2019.
Commenting on the result, Rex executive chairman Lim Kim Hai said: “Since the start of the FY, the economy was severely impacted by the US-China trade war, with a series of natural disasters further compounding the situation. The very weak AUD also impacted earnings severely.”
“Although earnings were down by 30 per cent in 1H FY20, we believe that the Rex Group remains fundamentally strong to weather the temporary setback.
“The devastating bush fires of the last three months and the COVID-19 outbreak since the end of January did not appear to have a very big impact on regional travel on Rex’s network.
“The Rex Group has recently secured two very exciting and significant new businesses and we believe that these will bring about considerable contributions to Rex’s earnings over the next decade.”
In November 2019, Rex announced its acquisition of a pilot academy in Ballarat. The airline was also awarded a NSW Ambulance tender in February.
However, the regional airline has also recently been forced to cancel its Adelaide-Kangaroo Island service, and has warned of the potential of a similar fate for its Sydney-Orange service, due to “anti-competitive behaviour” by Qantas.