Regional Express (Rex) has declared the Australian aviation sector to be in deep crisis after reporting a near halving of full year net profit.
The airline said net profit for the 12 months to June 30 2014, fell 44.9 per cent to $7.725 million, from $14.018 million in the prior corresponding period.
Revenue fell 1.9 per cent to $253.3 million, while passenger numbers declined 3.4 per cent to 1.053 million, Rex said in a regulatory filing to the Australian Securities Exchange on Thursday.
Rex executive chairman Lim Kim Hai said the carbon tax, an increased fuel levy to fund the Civil Aviation Safety Authority and record fuel prices were all negative factors in 2013/14.
“Aviation in Australia is in deep crisis with Qantas and Virgin Australia losing a combined $4.4 billion at pre-tax level for FY14,” Lim claimed in a statement on Friday.
“Regional aviation is even harder hit.”
Despite the profit decline, Lim said Rex was “Australia’s most profitable airline group” for the third consecutive year.
“This clearly demonstrates the prolonged and endemic crisis that is gripping Australian aviation,” he said.
Rex suffered a 1.3 percentage point reduction in load factor to 54.3 per cent, while capacity as measured by available seat kilometres, was cut by 1.8 per cent.
Lim said the repeal of the carbon tax was not enough to avoid the irreversible damage done to aviation, especially to regional aviation.
“God willing, Rex will be able to weather this storm,” Lim said.
“Our high efficiencies have enabled us to continue to be profitable, and our very strong foundations allowed us to make a significant investment of over $56 million even during these difficult times in the same way that we invested heavily when the Global Financial Crisis hit.”
In terms of the outlook, Rex forecast net profit in the current year would be “similar to or slightly improved” from 2013/14, while passenger numbers were expected to stabilise.
No dividend was declared.