Independent Australian regional heavyweight Regional Express (Rex) Thursday declared it had the wherewithal to withstand headwinds such as the nation’s devastating drought as it reported a 34 percent increase in net profit t to $A16.9 million.
Rex executive chairman Lim Kim Hai said the strong results — which saw pre-tax profit rise 41 percent to $A25.1 million on revenue of $A295.5 million — had generated a healthy cash surplus and would result in a total dividend for the financial year of 12 cents per share.
He said the outlook for the next 12 months was too uncertain for a precise profit forecast but there were grounds to believe Rex could still achieve double-digit growth if the Australian economy remained robust.
Nonetheless, Rex was mindful of “brewing global and domestic headwinds” that included the potential for fuel prices to spiral with oil sanction against Iran, a global trade war, a weak Australian dollar, an acute pilot shortage and the drought.
“However, having seen through equally tumultuous times in the last 15 years (more drought, SARS, wars, volcanic ash, stratospheric fuel prices, GFC) that have brought down 20 regional carriers in Australia, three in recent months alone, I am quietly confident that we have the wherewithal to withstand the storm if it does materialise,” he said.
The Rex chairman also recognized the dedication and perseverance of staff, particularly pilots, in working hard during the year to sustain services in spite of the pilot shortage affecting regional operators.
The airline saw a 3 percent rise in passenger numbers to 1.23 million in fiscal 2018 and the average fare was slightly higher at $A216.40.
The group load factor rose 4 percentage points to 61.3 percent as flying in terms of available seat kilometres fell by 3.5 percent.
In addition to its optimism about the Australian economy, Rex said tailwinds included a stronger enrolment in its pilot training academy and a new route in Western Australia that was expected to bring in an additional contribution to the group