As its losses grew by $42 million in FY22, Rex has thrown the blame at COVID-19-related border closures and the war in Ukraine.
After taxes, the airline lost $46.1 million, up from a loss of $3.86 million the previous year, prompting the company’s executive chairman, Lim Kim Hai, to explain the growing loss.
The chairman says, “I am mildly pleased that our performance is not much worse than it is, considering that COVID devastated practically three quarters of the FY and the war in Ukraine starting in February caused crude oil prices to skyrocket by over 70 per cent during the financial year peaking at a near-record high of A$174 per barrel in June 2022.”
Revenue at Rex increased by 25% to $319.2 million from $256.1 million in FY21, despite a 1,096 percent year-over-year increase in the loss.
The B737 fleet was grounded for nearly four months owing to border closures, which the company says was the primary cause of their loss. Rex said it did not lay off any employees during this time and bore all expenses related to its aircraft leases.
Passenger flights accounted for the bulk of the company’s FY22 revenue ($230.5 million, up from $125.1 million), followed by charter flights ($47 million) and freight ($1.5 million).
Were it not for a tax benefit of $22.1 million, the company’s losses would have been even worse at $69.3 million.
To that end, Hai says that since the start of the new fiscal year, Rex has “turned the corner,” with encouraging results in terms of operational statistics.
While the Regional Saab Operations had improved passenger numbers, revenue, and load factors compared to pre-COVID records despite 5% less flying, Hai reports that the Domestic Jet Operations load factor was at an all-time high of 86% in July.
Partnerships with corporations and travel agencies formed at the end of the previous fiscal year have led to these positive results. During the first two months, we have received 35% of the agreed-upon monthly payments for the partnerships, and there is every indication that this performance will only improve going forwards. “I also note that fuel prices have retreated to A$130 per barrel in the most recent week.”
According to Hai, Rex’s August bookings have been consistently high so far, with a 50% increase in activity compared to the same week in July.
With any luck, FY23 will see a return to profitability for the group.
The news comes as Rex celebrates its 20th anniversary, marking two decades since regional carriers Hazelton Airlines and Kendall Airlines merged to form Regional Express.
Rex’s cash balance as of the end of the fiscal year was $42.2 million, an increase of $12.1 million from 30 July 2021.