- Regional Express (Rex) revealed $19.4 million in losses during the 2020 financial year.
- Passenger revenue also dropped by $65 million.
- However, the company said its losses were reduced thanks to the federal government’s grants and wage subsidies.
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Regional Express (Rex) released its latest earnings results, revealing how its losses were reduced as a result of government support.
The company revealed statutory losses after-tax of $19.4 million for the 2020 financial year, with passenger revenue falling by $65 million. It came as the coronavirus pandemic hammered the travel industry.
“The COVID-19 pandemic devastated almost every industry with aviation being hit the hardest,” Rex Executive Chairman Lim Kim Hai said in a statement to the ASX. “Even Rex, which had virtually no debt and strong cash flow in the past, was brought to its knees with passenger numbers plummeting 90% between 15 March 2020 and 28 March 2020.”
The company’s losses, however, were eased by federal government support.
“The losses were reduced by grants provided by the Commonwealth to all regional carriers to assist with financial liquidity,” Lim Kim Hai said. “Rex booked in $62.1 million of such government grants and subsidies in FY20 which included the JobKeeper subsidy.”
Lim Kim Hai also thanked the Morrison Government for its support, which he said “saved Australia’s regional aviation industry.”
“If they were to lose their essential air services, remote and regional communities would have been dealt yet another mortal blow following the devastating effect of drought, bushfires, floods and now the pandemic,” he said.
The company believes the regional aviation sector will recover faster than its domestic or international counterparts. “Barring further waves of outbreak, Rex sees regional aviation returning to normalcy within two years,” Lim Kim Hai added.
The company is also looking forward to starting domestic jet operations in March 2021.
Rex’s resuults come after major airline Qantas posted $1.96 billion in statutory losses during the last financial year.
“The impact of that is clear. COVID punched a $4 billion hole in our revenue and a $1.2 billion hole in our underlying profit in what would have otherwise been another very strong result,” Qantas CEO Alan Joyce said in August.
During the last financial year, Qantas grounded its international fleet and let go of thousands of workers.
Virgin Australia, on the other hand, collapsed into voluntary administration before being saved by Bain Capital. Under its new owners Virgin revealed it is simplifying its fleet, slashing 3000 jobs and discontinuing its Tigerair operations.
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