Rex’s capital city 737 flights hit profitability in September for the first time since resuming full operations in February this year.
Chairman Lim Kim Hai said the result was “truly unprecedented in the airline world” and added the business is looking to acquire another two 737s to expand its fleet of seven.
It comes a day 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 $1.3 billion in the first half of the current financial year.
On Monday, Lim said, “This result was foreshadowed in our media release of 24 June 2022 when we predicted that the agreements with corporates and travel agencies, finalised at the tail end of the prior Financial Year (FY), would very quickly translate into strong passenger and revenue growth.
“True to form, our domestic jet network passenger numbers for the first three months of this FY grew by 60 per cent, 34 per cent and 77 per cent respectively when compared to June 2022.
“Revenue growth has been even stronger at 84 per cent, 47 per cent, and 137 per cent for the same three months, suggesting significant yield improvements.
“The Board gave guidance on 2 August 2022 that it expected FY 2023 to be profitable overall and the current results has further strengthened its conviction.
“Encouragingly, October 2022 appears to be even stronger than September 2022, with passenger numbers on the jet network 16 per cent higher for the first half of the month when compared with the previous month while revenue increased 35 per cent on 13 per cent more flying.”
Lim was referring to its 10-year deal with Flight Centre to become a “partner of choice” alongside agreements with other travel agents, including Helloworld, Webjet, and Consolidated Travel.
On Sunday, Virgin also declared it had returned to real profitability for the first time in a decade, which it put down to by removing $300 million worth of costs and re-contracting more than 450 corporate accounts.
Virgin and Rex’s positive figures follow Qantas this month also declaring it had completed a turnaround that will see it target an underlying profit before tax of up to $1.3 billion in the first half of the current financial year.
The result came despite the wider group recording an underlying loss before tax of $1.86 billion in its last full-year results and claiming the pandemic cost its airlines $7 billion in total.
Airlines appear to be taking advantage of pent-up demand for domestic travel, and Qantas believes its revenue for leisure travel is at more than 130 per cent of pre-pandemic levels.