iscover
Rex’s capital city 737 flights generated a profit before tax of $2.8 million in November, up $800,000 from the month prior.
The airline said it was the third consecutive month its domestic jet operation had been profitable since it resumed flying in February 2022.
It comes after Virgin claimed to have hit real profitability for the first time since its damaging ‘capacity wars’ battle with Qantas and weeks after the national carrier itself said it was targeting an underlying profit before tax of up to $1.45 billion for the first half of the current financial year.
In a new statement to the ASX, Rex said, “The regional Saab 340 operations are still making a loss of less than $0.2 million for November, but EBITDA (earnings before interest, taxes, depreciation, and amortization) for the month has doubled to $2.2 million from the positive $1 million for the month of October, again making it the third consecutive month the regional operations have been cash-flow positive since COVID.
“The company believes that the regional Saab operations will return to monthly overall profitability in the current quarter.
“The entire Rex Group showed a profit for the second consecutive month, with the profit before tax (PBT) for the month at just over $3 million following a smaller PBT of $800,000 the month before.
“The Rex board reaffirms its forecast that, barring any further external shocks, the company will return to profitability before tax for the financial year.”
Rex first launched capital city flights in March 2021 after securing $150 million in investment.
However, the move triggered a furious row with Qantas, with the smaller airline accusing its bigger rival of “predatory” behaviour for apparently responding by launching services on previously Rex-exclusive routes.
The fiery war-of-words saw Qantas CEO Alan Joyce mock Rex’s “empty aircraft” while Rex deputy chairman John Sharp questioned how Joyce could “look at himself in the mirror some mornings”.
Qantas has consistently denied any wrongdoing.
The rivalry was then surprisingly reignited last year when Rex bought FIFO business Cobham, shortly after Qantas said it planned to purchase rival FIFO provider Alliance.
Rex mocked Alliance’s “30-year-old” Fokker 100s and said resource companies in the Alliance stronghold of Queensland had been facing “severe issues with capacity and reliability in recent years”.
Qantas’ deal to buy Alliance has, however, yet to be cleared by the ACCC, which has already raised concerns.
The Flying Kangaroo has remained bullish that any takeover would not hurt the “highly competitive charter segment”.
It currently holds a 19.9 per cent stake in the carrier, with the new agreement seeing it acquire the airline outright.
