Rex flags frequent flyer program as domestic network expands

Rex has managed to finish the 2023 financial year in the black thanks to some creative accounting that turned a $31.7m operational loss into a $14.4m statutory profit.

Rex deputy chairman John Sharp. Picture: Britta Campion

Rex has managed to finish the 2023 financial year in the black thanks to some creative accounting that turned a $31.7m operational loss into a $14.4m statutory profit.

The difference was a one-off $44.5m “fair value contribution” from Rex’s 50 per cent acquisition of National Jet Express.

The airline paid $48m last year for a stake in the company previously known as Cobham Aviation Services, in an effort to move into the lucrative FIFO and charter markets.

The operating loss was an improvement on last year’s $109m loss and was attributed by chairman Lim Kim Hai to “acute pilot shortages and severe dislocation of the supply chain”. Such issues had seen up to a third of the airline’s Saab 340 fleet remain parked since late April, forcing cuts to regional flying.

In the six months to June 30, passenger revenue fell 10 per cent compared to the previous half. As well as reduced regional flying in the second half, it had fewer corporate passengers whose travel budgets had been exhausted by high international fares.

Deputy chairman John Sharp said the prospects for 2024 were brighter, as Rex took delivery of more Boeing 737s, taking their fleet to 10. The jets would smooth the way for expansion of their domestic network, currently operating to nine major cities, and bring in more passenger revenue, he said.

A frequent-flyer program was also in the pipeline in response to “customer demand”, Mr Sharp said. “One of the things our check-in staff tell me is passengers are constantly asking ‘where’s our frequent-flyer program’ and I think it will be very well received because it is one point of difference between ourselves and Qantas and Virgin,” he said.

“We’ll level that playing field to an extent with this, so we’ll be able to offer people who fly with us the opportunity to earn points and use points and I think that will be quite a welcome addition to the offering.”

He said Rex’s two pilot academies, at Wagga Wagga and Ballarat, were in for a busy year of training cadets for the airline, as well as overseas pilots. In the year to June 30, 40 Rex cadets were expected through the training academy and 200 from China, Vietnam and Singapore.

Mr Sharp weighed into the debate over the federal government’s decision to block Qatar Airways from flying another 28 services a week into Australia. As a former transport minister, he said he found it hard to fathom.

“(Qatar Airways) have been very good citizens, they flew more than Qantas during the Covid period bringing Australians home and they’re a good airline, one of the best in the world,” he said. “The hard thing for international airlines is usually to establish the bilateral agreement in the first place, and any increase (in flights) is really driven by demand.”

When considering whether more flights were in the national interest, governments would normally take into account whether they would boost the national economy, create jobs and inject fresh money into the system: “You don’t just operate air services agreements based on ‘does it suit a particular airline in Australia’.”

Rex paid no dividend to shareholders due to its operating loss. Shares closed down 3c on Wednesday at $1.03.