Regional Express flags $35m loss for financial year due to pilot shortage and dry-up in business travel

Regional Express has flagged it will sustain a loss for the financial year due to a pilot shortage and reductions in business travel. The listed airline group said it is expecting an operational loss of $35 million for financial year, despite revenue still being higher than pre-pandemic levels. Rex blamed a global pilot and engineer shortage, along with “supply chain shocks”, for reducing its flight schedules over the last few months. It also noted business travel has reduced across the group. “The global shortage of pilots and engineers, along with supply chain shocks post-COVID have disrupted Rex’s network, forcing Rex to make significant reductions to its flight schedules over the last couple of months to match the need for aircraft, pilot and engineers to what is available,” Rex said in an update. “Furthermore, business travel in the months of May and June have significantly reduced due largely to corporate travel budgets being exhausted following exponential increases of international fares.” Rex’s expected loss contrasts with major airlines Qantas and Virgin Australia, which are both expecting higher profits due to increased demand for travel in the past 12 months. The airline is still expecting positive earnings for the financial year. Its expected loss comes after the airline for financial year 2022 posted a loss of $46m. Rex said it remained “optimistic” about its profit outlook for financial year 2023-2024 and would continue expanding its domestic jet operations, which includes several new “contractual” works with its subsidiaries. This additional contractual work is largely through its joint venture with National Jet Express. “The unaudited revenue from regional Saab operations is above pre-COVID (FY2019) levels and the corresponding EBITDA has been positive for the financial year,” the airline said. Rex flies a number of intrastate regional services in WA including Albany, Carnarvon, Monkey Mia and Esperance. The lack of skilled aviation workers has meant around a third of Rex’s fleet of 58 Sasb 340 aircraft were not being used. This has largely impacted its east coast operations, while six of its seven Boeing 737s continue to service major cities.