Rex Airlines, Australia’s largest regional and domestic airline operator, has forecast a loss of $35 million for the financial year — a surprising downturn following earlier predictions of turning a profit.
Key points:
- Rex Airlines is forecasting a $35 million loss after company hit by pilot and parts shortage
- The regional carrier has initially predicted a year-end profit while regional flights rebounded post-COVID
- Rex operates a fleet of 59 Saab 340 and seven Boeing 737 aircraft
Rex, which operates a fleet of 59 Saab 340 and seven Boeing 737 aircraft servicing destinations across Australia, had in February predicted to profit by the end of the financial year.
However, in an ASX release the company said that they were now forecasting a loss of $35 million, despite noting that unaudited revenue from regional Saab 340 operations were above pre-COVID levels.
The airline blamed the unexpected financial loss on a global shortage of pilots and engineers, as well as post-pandemic supply chain issues that they say have disrupted their network.
Rex said it had been forced to make “significant reductions” to its flight schedule in recent months “to match the need for aircraft, pilot and engineers to what is available”.
Another issue the company says they are facing is a steep decline in business travel through May and June as corporate travel budgets continue to be stretched by the rising costs of international airfares.
Despite the losses, the airline remains optimistic as they continue to roll out their domestic jet operations and begin a number of contracts in their joint venture of National Jet Express, a prominent fly-in-fly-out carrier with additional freight and charter operations.
ABC