Rex downgrades to $35m loss due to shortages, EOFY cuts to business travel

Rex downgrades to $35m loss due to shortages, EOFY cuts to business travel

Photo: Rex Airlines, via Facebook.

Regional Express Holdings (ASX: REX) has reported disruptions to its network due to a combination of post-COVID supply chain shocks and a global shortage of pilots and engineers, prompting the airline to downgrade its FY23 guidance to an operational loss of $35 million.

This compares to expectations for positive operating profits in an announcement in February, following an operating loss of $1.9 million after tax for the December half.

The shortages led Rex to make significant reductions to its flight schedules over the last couple of months to match the need for aircraft, pilot and engineers to what is available.

"Furthermore, business travel in the months of May and June have significantly reduced due largely to corporate travel budgets being exhausted following exponential increases of international fares," the company stated in an ASX announcement published yesterday afternoon.

"Rex is now forecasting a group operational loss of $35 million for the FY. However, the unaudited revenue from regional Saab operations is above pre-COVID (FY2019) levels and the corresponding EBITDA has been positive for the FY.

"Rex remains optimistic for its outlook on a group operational profit before tax for FY2024 and beyond with the continued expansion of its domestic jet operations network and with the start of several new contractual works won by its subsidiaries including the recent joint venture in National Jet Express (formerly Cobham Regional Services)."

REX shares are currently down almost 17 per cent since the start of the year at $1.205, and are expected to fall once trading resumes. The company's shares were placed in a trading halt on Tuesday, 19 June, pending the announcement.

 

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