Australia’s biggest independent regional carrier, Regional Express, is “cautiously confident “it can achieve double-digit profit growth in the current financial year if oil prices remain the same.
But chairman John Sharp has warned the board is under no illusion profits will follow the “giddy trajectory” that produced a 40 percent increase in pre-tax profit in 2017-18
“We face ominous global and local headwinds that will not fail to have its impact eventually on the Australian economy,’’ he said in a prepared address to the airline’s annual meeting Wednesday.
“The trade war between the United States and virtually everybody else, the ban on Iranian oil imports that was responsible for Brent to be powering towards $US100 per barrel, the weakness in the Australian dollar and the crippling worldwide pilot shortage are substantial challenges.’’
Sharp pointed to a 78 percent drop in profits at Singapore Airlines for the September quarter and an 86 percent fall in Emirates’ first-half profits as examples of the impact of global factors.
But he said the board was cautiously confident that the group would still be able to turn in at least double-digit growth for the current financial year if fuel prices remained at today’s level.
The board’s optimism was borne out by revenue growth in the first quarter, he said.
Rex generated a $A25m pre-tax profit in 2017-18, up from $A17.8m the previous year.
Its net profit of $A16.9m was up from $A12.6m.
It said tailwinds included a new route in Western Australia that would bring an additional contribution to the group, an economic recovery in Australia and stronger international enrolment at its pilot academy.
Regional Express operates a fleet of more than 50 Saab 340 aircraft on some 1500 flights to 60 destinations across Australia.
Its wholly-owned subsidiaries include air freight and charter operator Pel-Air Aviation and Dubbo-based regional airline Air Link.