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Regional Express Holdings has posted a profit before tax of $19.2 million, despite what the airline’s chairman sees as a federal government “hell-bent on destroying regional aviation”. However, while its profit was 45 per cent down on the previous year, the airline laid claim to it retaining its position as the most profitable listed airline group in Australia.
An outspoken critic of government policy, executive chairman Lim Kim Hai said: “This would ordinarily be grounds for much jubilation but instead we at Rex are all too painfully aware that this pole position is an aberration arising from one of the most toxic environments ever to face aviation in Australia.”
Continuing his assault on what he sees as regressive policy: “Indeed for Rex, we barely had time to celebrate our 10 year anniversary and record profit in FY12, when we saw sales plunge almost immediately from 1 July 2012 after the federal government’s carbon tax was implemented, together with a whole host of policies hostile to regional aviation. Minister Albanese’s claim that the impact of the carbon tax would be little more than the cost of a cup of coffee became the understatement of the aviation year, when both businesses and households cut back on flying due to the rising costs in the economy.”
Rex ended the year with profits down 45 per cent and passenger numbers down 6.8 per cent.
Lim added: “Rex is a very efficient, formidable and operationally excellent airline. Our earnings are even more than double that of Qantas. However, there is little we can do when the federal government appears to be hell-bent on destroying regional aviation and along with it, pretty much the rest of the economy.
“Rex remains confident of Australia’s future and our board has authorised an unprecedented investment plan of $50 million in this financial year so as to place Rex in a very strong position when the economy improves.”
The company has not declared a final dividend “in light of the huge capital needs”.
Regional Express, Australia’s largest independent regional airline operating a fleet of more than 40 Saab 340 aircraft, operates 1,300 flights each week to 35 destinations throughout New South Wales, Victoria, Tasmania, South Australia and Queensland. The Rex Group comprises Regional Express, air freight and charter operator Pel-Air Aviation and Dubbo based regional airline Air Link, as well as the pilot academy Australian Airline Pilot Academy.
Pete
says:All CEOs believe that they should be able to go about their business free of the irritation of government regulation and the offensive notion of having to pay taxes.
Blaming the carbon tax for REX’s woes is laughable, although entirely predictable. A better solution would be to recruit a more capable CEO.
Noel Tobin
says:Open letter to Lim Kim Hai, REX chairman, already mailed
Dear Lim
I read with interest your comments in the in flight magazine, Out There recently on the reasons you say your passenger numbers are down and why profits slumped by 32.6%.
Permit me to shed some light on this for you and in particular why I use other airlines whenever possible
I live in Forbes in Central West NSW about 30km from Parkes. Our business manufactures agricultural planting machines and our customers are in the wheat belt of Australia and wheat growing regions in eastern Europe.
I fly regularly to visit customers and for other reasons.
During the past year I have flown many times on the Parkes Sydney route and also on the Melbourne Wagga, Melbourne Mt Gambier, Adelaide Kingscote and Adelaide Mt Gambier routes. Also, my staff and family fly extensively, in fact my wife took a flight with Rex yesterday. Many times I have driven instead of flying due to my past experiences with Rex and I now use them only if I cannot travel by another method. I feel that businesses like ours which are based in the bush and service bush-based customers would be excellent customers of yours and ones that you would want to create some kind of confidence in that you would treat them well and be seen to look after them. Over the next two weeks, we have four people travelling to Sydney for onward travel and all of them will travel from Forbes to Sydney by road. I also fly from Dubbo and Wagga Wagga to Sydney using other airlines.
Staff for the most part are excellent, however, I have had many bad experiences as follows;
I was late for a flight from Orange to Sydney and although the pilot was still organising the flight at the check-in counter and the flight was not full, they would not allow me to check in.
I travelled to Adelaide from Parkes and my Rex flight was late into Sydney and I missed my connecting Virgin Flight. Virgin offered me the next available flight free but I would have missed my meeting in Adelaide and I had no choice but to travel with Qantas. I asked Rex for some assistance but was told they were not required to give any assistance and I should consider insurance in future. The Rex reply is at the bottom of this mail..
I have been a frequent flier for years but the one in 9 flights is gone, what is the point, what is the advantage.
The finger ID admittance to the lounges is a joke, especially in Melbourne. Mine seldom works in Sydney and it does not work in Adelaide or Melbourne. I waited for over twenty minutes one day at the door of the Melbourne lounge for assistance, all this after I had rushed from Swann Hill to be there on time. An assistant eventually came and told me that I had to be ID’d in each venue. However, he could not do it as he only had a “hard key”. I asked him so send somebody down with an appropriate key but of course, no one showed up. With this lounge, you need to go outside and through security to go to the toilet, what a hassle, worse if your ID does not work.
Surely this can be fixed up and when customers join, they can gain access to all venues. Also, can you open the bar at 2pm instead of 3pm like other airlines, I fly from Sydney on the 3:55 to Parkes and of course it is generally too late to have a drink.
I am now finger printed in Adelaide but it remains to be seen if it will work. In Adelaide, you also have to go out of the lounge to toilet, not a big problem unless your finger ID does not work.
I sometimes travel to Sydney without any checked in baggage but when I am overweight, I am charged. I previously recommended there be credits for those flights where there is no checked in baggage. I’d understand if the flight was full but this is generally not the case.
Just like you, I also have customers and I travel quite a lot and I know how customers in the industry are treated. I also talk to other travelers and know that there is much dissatisfaction with Rex’s policies and I am not the only one that use Rex only when necessary. The only reason many customers use you at all is because there is no competition. I have had similar problems in the past with Qantas and it has always been sorted out to my satisfaction. If you always take a hard line with customers, even though technically you might be correct, it’s not worth it if you lose customers. If you are more accommodating and flexible, then when things go wrong, people will be more understanding, you know, the swings and roundabouts thing. People in the bush are used to friendly services and are taken aback when companies start reciting rules and regulations that are always one way. I.e., if I am late, I suffer, if you are late, I suffer. Other airlines have the same rules but seem to be more flexible in their execution. Slogans such as “Our heart is in the country” only ring true if it happens on the ground, otherwise, they are a waste of time and a joke. I think you will continue to hemorrhage customers unless you change your policies and allow discretion from time to time.
However, in my opinion, it’s not all doom and gloom. Your staff in Sydney are delightful, they would be as good as any airline staff in the world, the lounge is pretty good too once you get in, just open the bar at two like other airlines instead of three. We need a good airline in the bush and we need REX to grow but to do this you should also be aware that friendliness and cooperation will get you further than reciting rules and regulations in your efforts to have things always go in your favor. I think the phrase, “penny wise and pound foolish” applies.
I suggest that you should look at your own hard line policies and fix up the things that are wrong and that which you have total control over before you go about blaming others and blaming policies over which you have no control. Perhaps your words would have more credibility if your own house was in order first.
Yours Sincerely
Noel Tobin
Spencer Ferrier
says:If Rex is saying this about its environment, imagine what those who are smaller carriers are thinking about the present state of aviation.
Imagine what the passengers who can’t get the chance to travel are thinking too