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Rex eyes return to profitability, more 737s

written by Hannah Dowling | August 2, 2022

Rex has announced that its regional revenue and passenger numbers have returned to pre-COVID figures, as it eyes a return to profitability within this financial year.

In an ASX release on Tuesday, the carrier also stated that it has nearly doubled its revenue across its domestic capital city network since April, returning $13.6 million in revenue in July.

Further, the airline said its load factor, which measures the percentage of available seats filled by passengers, was 86 per cent in July across its network.

It comes after various reports in recent months stated that Rex has struggled to fill its newly-acquired Boeing 737 jets on its main city routes, after last year scaling up from a regional carrier to take on Qantas and Virgin.

Rex launched its first 737 flights between major cities in March 2021, and has since expanded its network to include flights between Sydney, Melbourne, Brisbane, Adelaide, the Gold Coast and Canberra.

“I have every expectation that our numbers will continue to grow sharply over the next few months,” said Rex Executive Chairman Lim Kim Hai.

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As such, Rex intends to take delivery of its seventh leased 737-800NG by the end of this month, with possibly another two jets to be delivered by the end of this year.

Together with its regional operations, Rex saw a total of $31.5 million in revenue in July, and has predicted that both its regional and domestic networks will be profitable by mid-2023.

The news comes as Rex celebrates its 20th anniversary, marking two decades since regional carriers Hazelton Airlines and Kendall Airlines merged to form Regional Express.

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“The last two decades could not have been worse for aviation in Australia…” Kim said. “…and yet, here Rex is standing tall.

“By the grace of God, the timely assistance from the Federal and State governments, our dedicated staff, and most importantly, the support of the Australian people, Rex has not only survived but has emerged stronger.”

Lim said that Rex has “made a vow to repay the people of Australia” for the $87.4 million in government aid that the carrier received throughout the pandemic.

“We hope that we have started to repay this faith in some small ways by providing a service the travelling service can count on.”

Rex said its “unparalleled reliability” is one way it hopes to do so, after the airline in June reported far more favourable results for flight delays and cancellations than its rivials.

According to the Bureau of Infrastructure and Transport Research Economics (BITRE), 82.7 per cent of Rex flights departed on time in June, while just 0.7 per cent of flights were cancelled.

This was despite Australia’s airlines recording their worst-ever month for flight delays and cancellations in June, amid widespread staff shortages coupled with an influx in demand that decimated on-time performance results for rivals Qantas and Virgin.

In comparison, on average just 63.0 per cent of all flights arrived on time in June, while 61.9 per cent departed on schedule. Meanwhile, a total of 5.8 per cent of all flights were cancelled over the month, nearly three times more than the long-term cancellation average.

The Qantas Group was again the worst offender in June, after it cancelled 8.1 per cent of all scheduled flights in June, with over 40 per cent of all flown flights seeing a delay.

Meanwhile, rival Virgin cancelled 5.8 per cent of its flights, and saw 62.4 per cent of on-time arrivals for the month.

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