Regional airline Rex has reported a double-digit drop in net profits for the 2014/15 financial year, despite significant expansions in regional Queensland services.
The company released its full year results last Friday, ending the year with a profit of $9.3 million before tax, a figure that represents a drop of 12.8 per cent compared with last year’s results.
Rex General Manager for Network Strategy, Warrick Lodge, attributes the fall in revenue to ongoing drought and decline in the resource sector.
“We’re facing pretty weak economic conditions in a lot of the regions that we service… We do have a number of regions that are directly affected by the fall in mining traffic,” he says.
However Mr Lodge is still optimistic about the coming year’s developments despite the nosedive in company figures.
“We’ve finished the financial year with a profit and we see that as a pretty solid result in light of hose difficult the operating conditions are,” he says.
“We’ve seen a lot of other independent regional airlines collapse in recent years and Rex has been working hard on investing back into the business to make sure we’re well positioned to take advantage of any opportunities that arise in the future when things start to improve.”
Regional Queensland has been a major focus for the airline, which has started servicing sixteen new Queensland regions since January this year.
The company was awarded three new regulated routes by the Queensland Government in 2015, making it the key service provider to regional Queensland.
The new routes means greater connectivity for remote Queensland, enabling the transport of freight, health services as well as opening new business opportunities.
Small communities rely on specialists flying in, as well as being able to go to bigger towns and cities to access services.
“The remoteness of the outback Queensland operations is unique, and the service is just extremely relied upon by the local communities that we serve,” says Mr Lodge.
The recent developments in Queensland have contributed to the company’s drop in profit margins as a result of one-off set up costs.
“We’ve really been investing heavily in Queensland in the last financial year. We’re really keen to find other opportunities and start flying between other Queensland destinations.”