Regional Express says passenger numbers are picking up and it expects fatter profit margins in the next financial year as travel comes back from the dead, after a sharp uptick in fuel and employee costs pushed the airline to its worst full-year loss in its 16 years as an ASX-listed entity.

The after-tax loss reached $46.1 million in the year to June 30, a steep fall from the $3.9 million loss reported in the 2021 financial year. It came despite a 24.6 per cent increase in revenue to $319.2 million, as fuel costs ($65.4 million) more than doubled due to the war in Ukraine and staff costs ($149.4 million) rose by almost 40 per cent as the airline ramped up its new domestic flights.