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Rex chairman hails financial results despite $7.2m loss

written by Adam Thorn | August 31, 2021
One of Rex's latest 737s, VH-REX, as shot in Melbourne YMML by Victor Pody
One of Rex’s latest 737s, VH-REX, as shot in Melbourne YMML by Victor Pody

Rex’s executive chairman, Lim Kim Hai, has said his airline performed “relatively well” during the last financial year despite recording a loss before tax of $7.2 million.

“The airline industry has never been as badly ravaged in its entire history as today,” said Lim.

The business’ revenue during the first full 12 months of operating during the pandemic slipped 20 per cent to $256.2 million, but that included government aid of $87 million.

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Rex this year launched capital cities flights for the first time in its history, after securing $150 million in investment from PAG Asia Capital. Its underlying loss before tax, excluding market-to-market adjustments related to that funding agreement, was $18.4 million.

In a statement announcing the results, Lim said, “To understand the magnitude of the devastation, the drop in global passenger numbers was 16 per cent during the global financial crisis. Rex’s passenger numbers fell by 29 per cent in the past FY.

“The first half of the FY22 will continue to be dominated by rolling lockdowns and border closures. It is possible that the second half will be struck by further waves of infection given the experience of other highly-vaccinated countries. As such the outlook for the year is highly uncertain.”

Earlier this month, Rex confirmed it would stand down 500 staff until at least 12 September.

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The business also revealed all affected employees would be eligible for the federal government’s $750-a-week COVID payments and remaining shifts on essential flights would be shared around between flight attendants.

Rex’s stand-downs include pilots, cabin crew, engineers, airport workers, call centre, ground and head office operational staff.

“This arrangement for our flight attendants is a great example of a pragmatic and unified approach as we grapple with the devastating consequences of lockdowns and border closures which have ravaged the entire aviation industry,” said John Sharp, Rex’s deputy chairman.

Rex’s difficult performance mirrors that of Qantas, which last week posted an underlying loss before tax of $1.83 billion that it blamed on “diabolical” operating conditions and sudden border closures in the second half of the financial year.

This is despite the airline receiving over $1.1 billion in government aid through multiple financial aid programs, including $558 million in JobKeeper wage subsidies.

Qantas also received a combined $188 million through the Regional Airline Network Support (RANS) and Domestic Aviation Network Support (DANS) programs, as well as Qantas’ overseas repatriation efforts on behalf of the government.

“This loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier,” Qantas chief executive Alan Joyce said.

“It comes on top of the significant loss we reported last year and the travel restrictions we’ve seen in the past few months. By the end of this calendar year, it’s likely COVID will cost us more than $20 billion in revenue.”

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Rex chairman hails financial results despite $7.2m loss Comment

  • Rod Pickin

    says:

    We live in era of almost total freedom to do whatever we wish to which it appears, is at the expense of reason, logic and common sense. REX’s hailing the loss of only $7.2M courtesy of the Oz. Govt aid of $87M, (our money) should be a wake up call to those within the aviation branch of our Government to listen to industry professionals when considering licensing/approval applications for RPT transportations. I think it fair/accurate to say that REX ‘s venture into mainline RPT operations at the time it did was inappropriate and outside the boundaries of reason, logic and common sense and I am sure most of the industry professionals were saying, hey, this aint gonna work, certainly not now and maybe not in the near future with our population numbers. Our system of government, by lobby, clearly by vested interested parties only has to be revised so that scandalous financial results such as we are talking about here do not happen again. No winners here!

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