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Rex says share rise behind $16.5m half-year loss

written by Adam Thorn | February 28, 2023

Victor Pody shot this Rex 737, VH-MFM

Rex has blamed a rise in the value of its shares for recording an after-tax loss of $16.5 million in its half-year results.

The airline said the overall deficit included the $23 million impact of 737-backers PAG converting their investment into equity in the company.

The business also again branded Qantas “predatory” for launching services on previously Rex-exclusive routes, which it argued had been a drag on its performance.

Other highlights in the results include its capital city 737 routes returning to profitability in September 2022; regional services being in positive EBITDA level for the last four months of the period; and revenue for the period improving what it called “282.2 per cent” year on year.

Executive Chairman Lim Kim Hai said, “The results are pleasing considering that domestic jet services only really operated in a relatively COVID-free environment since late February 2022. To achieve profitability in such a short period under a normal environment is fairly unprecedented in the world.”


Rex first launched capital city flights in March 2021 after securing $150 million in investment from APAC investment firm PAG Asia Capital.

The deal included a convertible note and warrant facility that enabled it to eventually increase its equity in the airline.

However, the move to fly major routes 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.

Rex’s results compare less favourably to its larger rival, however, with Qantas last week recording an extraordinary half-year profit before tax of 1.428 billion on the back of better-than-expected demand for flying post-COVID.

Qantas called the result a significant turnaround that was underpinned by “revenue strength” offsetting record fuel prices.

The widely-expect 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.

Virgin Australia also told staff last month it generated $2.5 billion in revenue during the first half of the financial year.

Chief executive Jayne Hrdlicka said in a note that the business expects a profit margin of “roughly 5 per cent” ahead of a likely relisting on the ASX.

“This is the first time in many years that Virgin has made a profit,” Hrdlicka wrote. “The results reflect the progress we have made in rebuilding the financial resilience that is so important to Virgin Australia’s long-term success.”

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