Australia’s Regional Express has revised its full-year earnings forecast — from breaking even to a pre-tax loss — as a resurgence in coronavirus cases has forced a significant number of flight cancellations.
In its latest guidance, issued on 9 June, the carrier now expects a pre-tax statutory loss of A$15 million ($11.6 million) for the year ended 30 June.
“The latest Covid-related state border restrictions and lockdowns have severely disrupted Rex’s domestic and regional networks, forcing Rex to cancel a large number of flights to/from Melbourne,” the airline states.
As recent as 10 May, Rex was optimistic of its earnings prospects, disclosing that it was hopeful of a breakeven scenario for the full year.
Rex stated in a business update then that its cash position has “improved exponentially”, with its unencumbered cash reserves increasing tenfold compared to March 2020, as a result of strong forward bookings.
Since then, a spike in coronavirus cases in late May in Melbourne and the state of Victoria prompted the state, Australia’s second most populous, into a snap lockdown for a week.
While restrictions have been eased across the state, Melbourne will only see the lockdown lifted after 10 June.
Rex postponed the launch of mainline service between Melbourne and Canberra — to operated with its Boeing 737-800s — by a week following the lockdown. It also operates jet services from Melbourne to other major Australia cities, including Sydney, Gold Coast, as well as Adelaide.
