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Rex blames pilot shortage as it predicts $35m loss

written by Adam Thorn | June 20, 2023

A Rex 737-800, VH-RQC, takes off. (Image: Rex)

Rex has revised its interim profit guidance for the financial year to predict an operational loss of $35 million.

The airline blamed a global shortage of pilots and engineers, along with supply chain shocks post-pandemic that have forced schedule reductions.

Rex had said in February it was “cautiously optimistic” it would be profitable in FY23 despite recording an after-tax loss of $16.5 million in its half-year results.

In a surprise statement, the business added a rise in international fares had reduced demand for local business travel but said it believed it could record an operating profit before tax for the next financial year.

The announcement – which forced it to halt trading on the ASX – comes after it reduced services on nine regional routes in May and following reports that almost a third of its Saab 340s are grounded.


From 1 May, nine routes served by Saab 340 turboprop aircraft in Victoria, New South Wales, South Australia and Queensland saw reduced services, with four more routes having their timings changed and the Mildura-Adelaide service being suspended altogether.

The shortages of regional pilots and engineers have become a well-known issue, with the Regional Aviation Association of Australia (RAAA) joining a new alliance earlier this year to push for more attention on the issue.

“It’s no use hoping people will just move to the regions – we need better housing, education, health care, and of course, air services for vital connectivity,” said RAAA CEO Steven Campbell, who hopes to see these critical skills shortages in regional aviation alleviated.

Campbell has pointed to a report from the US Regional Airlines Association on regional pilot shortages, which showed 324 regional American airports have lost a third of their service on average, with more than 50 losing over half of their air service and 14 losing air service entirely.

“This is just around the corner for us here in Australia, which is being exacerbated by a critical shortage in aircraft maintenance engineers,” he said.

“We can’t just expect people to move to the regions, so I am pleased that the private sector is doing its bit to push this agenda to the top of the priority list for the current government.”

Despite its talent shortage troubles, Rex’s 737 operations are still expanding, with flights from Melbourne to Hobart beginning on 17 August.

The 75-minute flights will depart Melbourne at 12:15pm to arrive in Hobart at 1:30pm before leaving at 2:15pm to touch down in Melbourne at 3:30pm.

According to Rex Deputy Chairman John Sharp, the service will provide good connections to Sydney, Adelaide and Brisbane flights at less than half the cost of the cheapest Qantas fare.

“Our long-standing commitment to Tasmania spans more than 40 years through our regional airline services. For too long, Hobart has had to endure sky-high airfares because of capacity constraints and price gouging by our competitors,” he said.

“Our new service will provide passengers with affordable fares delivered with Rex’s trademark country hospitality and reliability.”

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