Regional Express (Rex) has its fingers crossed for an exceptional 2023 financial year after a record result in July. Rex confirmed its highest ever passenger numbers and revenue on its domestic and regional turboprop jet networks for July. For the first month of the new financial year, Rex’s pre-audited base passenger revenue was A$13.6 million, nearly double the monthly average of the previous three months at A$6.87 million. It’s a result that Rex’s executive chairman, Lim Kim Hai, calls “astonishing.”
Exceptional expenses and record income for Rex
Highly reserved aircraft help explain exceptional revenues. Rex’s load factor was 86% across the entire home network. Although the airline did not provide a breakdown between its primary jet routes and its turboprop routes, Simple Flying understands that the average load factor on Rex’s turboprop services averaged between 70% and 75% in July, with significantly higher loads on the jet. services.
Rex also added that the number of regional flights operated in July was 4% lower than in July 2019. However, even with this reduction, revenue per flight and passenger load factor on turboprop services increased by 8% and 7%, respectively.
Like most other airline markets, the Australian domestic airline market faces some challenges. Labor shortages at airlines, airports, and contractors pose ongoing operational challenges, leading to significant delays, cancellations, and disruptions (though Rex escaped the worst).
Add to that a winter flu season, continued waves of COVID-related illnesses, persistently high fuel prices and an unusual amount of bad weather on Australia’s east coast, and it’s a relatively hostile environment for any airline company. But helping to alleviate the pain for airlines, and which also partly explains Rex’s record monthly revenue, is strong passenger demand and rising ticket prices.
Rex’s turboprop operations performed extremely well in July. Photo: Regional Express/Rex
New Boeings to increase frequencies
However, a stellar start to the new fiscal year won’t immediately erase Rex’s COVID hangover. The airline’s annual results for fiscal 2022, which ended June 30, are due to be released soon. It is unlikely that there is anything record about them. It was only in the final three months of fiscal 2022 that Rex (and other Australian airlines) began to enjoy a sustained rebound. It’s still in its infancy, but barring further significant disruptions from COVID, Rex is looking to return to profitability this fiscal year. This will give the Rex’s C-suite crew and shareholders something to cheer about.
Meanwhile, Rex confirmed Tuesday morning that another Boeing 737-800NG will enter service later this month. That aircraft is VF-MFM, a leased 7.7-year-old Boeing that previously flew for El Al Israel Airlines, Vistara Airlines and Samoa Airlines, among others. The plane is still in France, preparing its flight to Australia. Rex expects two more 737-800NGs to join VH-MFM by the end of the year, bringing the total size of the airline’s Boeing 737-800 fleet to nine.
After a bumpy start, Rex’s Boeing 737-800s are now flying near full capacity. Photo: Regional Express/Rex
Rex Vice President John Sharp said the new planes will initially be deployed on existing routes. He says passenger loads on existing 737-800 services are near capacity and there is a need to increase frequencies. However, notes Mr Sharp, with the additional planes, it is possible to revisit previous plans to launch new routes.
“Rex is the only airline in Australia, and possibly the only one of five in the world, to have had zero operational losses from 2003 up to COVID. Our best-in-class operations are unquestionable,” adds Lim Kim Hai. “With such financial and operational prowess, we look forward to this fiscal year with confidence as we turn the corner from these devastating COVID years.”