Regional airline Rex just posted a bigger profit than Virgin Australia

suppliedRegional Express.

Sydney-based Regional Express (Rex) Group is once again Australia’s most profitable airline.

The company announced a statutory Profit Before Tax of $13.8 million on a $151 million turnover for the first half of the financial year.

The ASX-listed airline said the result was a 60% improvement on 12 months earlier, with Executive Chairman Lim Kim Hai saying passenger numbers were up 3.6%, continuing the trend of last year.

“The Board believes that 2H FY18 will also see improvement over the prior period although not by such a spectacular amount,” he said.

“Over the full FY, we believe that the overall results should show an improvement of over 20% compared to the prior year.”

Rex’s PBT result is greater than Virgin Australia’s $8.4 million figure on revenue of $2.4 billion, reported today, although Virgin says its underlying profit before tax was up 142% to $102.5 million, its highest figure in 10 years.

Virgin Australia finally returned to profit in the last six months after posting a full year statutory loss of $220.3 million in FY 17, an improvement of $38.9 million on 2016.

Meanwhile, rival Qantas last week posted an underlying profit before tax of $976 million for the six months to December. Statutory profit after tax was $607 million, up 17.8%.

While Qantas and Virgin posting big losses in recent years, Rex posted has posted only one loss since listing in 2005, two years ago, with a statutory after tax loss of $11.4 million after writing down more than $17 million in assets, goodwill and fuel hedging.

In today’s half year result, Rex saw load factors increase 3.3% to 59.9% and the average fare increase by 0.5% to $214.60. Passenger revenue grew by 4.2%.

And for the first time since floating on the ASX in 2005, the company declared its first interim dividend of 4 cents per share, fully franked.

Rex, formed in 2001 after buying to regional businesses from the collapsed Ansett group, operates a fleet of 50, 34-seat Saab turboprop aircraft servicing 60 destinations, maainly NSW, Queensland and South Australi. The Rex Group operates subsidiaries Pel-Air Aviation (an air freight and charter operator), Air Link (a Dubbo-based regional airline) and the Australian Airline Pilot Academy.

Rex shares were up this morning 6.4% to $1.74.

Here are Rex’s results for H1 FY18.

Rex.

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