Rex lobs bid for Australia’s Antarctic operations after profit downgrade
Regional Express has flagged its intent to apply to service Australia’s research missions in Antarctica, weeks after downgrading its profit forecast for this financial year.
Rex confirmed on Tuesday it had submitted a response to a request for information issued by the Australian Antarctic Division, ahead of a formal request for tender expected in November.
The Antarctic program will require one large intercontinental passenger jet, four intercontinental turboprop aircraft and four twin-engine helicopters.
The airline’s Antarctic project manager Craig Martin said Rex was equipped for the contract due to its experience flying for the Department of Defence and select state air ambulance operations.
“We believe there is no better Australian candidate than the Rex Group with its expertise in
operating a fleet of 150 aircraft in every state ranging from Boeing 737-800NG, Embraer E190 airliners, De Havilland Dash 8-400 turboprops, over 55 Saab 340 turboprops, one of the largest fleet of Beechcraft King Air aircraft in Australia, and the recently introduced Pilatus PC24 jets,” Martin said.
Rex said it would lean on a consortium of industry partners to operate some aspects of the Antarctic program which require “more specialised expertise”.
It’s not clear whether the expected delivery of two Boeing 737-800NG planes leased from Singapore Airlines is still on track. The airline signed a letter of intent with Singapore Airlines in February with the planes originally scheduled to arrive in June and July, but has not responded to inquiries about the order since.
Regional Express on June 20 disclosed it would end the financial year in the red and downgraded its forecast to a $45 million loss following a bullish February outlook. One day after the downgrade, Rex was awarded best regional airline in Australia and the Pacific at the 2023 Skytrax World Airline Awards.
With about 5 per cent of market share, the airline has a significantly smaller operation than competitors Qantas Airways and Virgin Australia.
Qantas, Virgin and Regional Express all declared a return to profitability in 2022, with Qantas issuing two profit upgrades for the December half of 2022, and Virgin Australia’s owner, Bain Capital, considering returning the airline to the ASX less than three years after it came out of voluntary administration.
The downgrade triggered questions from the Australian Securities Exchange, after concerns the carrier had waited too long to alert shareholders to the forecast reversal.
Rex told the ASX it became aware of the loss one week ahead of its disclosure but waited for the information to be “reviewed” by its chairman Lim Kim Hai.
The airline blamed the fall in performance on the lack of momentum in corporate travel due to exponential growth in airfares.
When unveiling the airline’s half-yearly $16.5 million loss in February, Rex said it would return to profit by the end of the year due to strong domestic performance. The company reported an after-tax loss of $46.1 million for the 2022 financial year.
Rex’s share price has shed 16 per cent since the announcement to $1.05.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Most Viewed in Business
Source: Thanks smh.com