Rex airlines profit down 10 per cent
February 27, 2008 - 3:17PM
Regional Express Holdings Ltd failed to declare an interim dividend after the rural airline posted a 10.4 per cent dip in half year profit because of rising fuel costs and flight cancellations from a shortage of pilots.
Net profit fell to $10.3 million for the six months ended December 31 from $11.5 million in the previous corresponding period even though revenue rose by 23.5 per cent to $128.9 million.
The number of passengers carried rose by 9.8 per cent to 772,837.
Rex said its profit was hurt by fuel costs, flight changes due to pilot shortages and the cancellation of its services between Olympic Dam and Adelaide in South Australia.
"Fuel unit costs increased 23 per cent in November and December, leading to an increase in total spending on fuel by $1.4 million," Rex said.
There was also a one-off increase in engineering costs of $3 million as a result of a clustering of major scheduled maintenance and weather-related maintenance.
"Acute pilot shortages, with a 60 per cent annualised attrition rate, resulted in an increased number of flight cancellations, route suspensions and service disruptions," Rex said.
"Consequently, there was also increased recruitment and training costs."
Rex also carried start-up costs of a pilot academy in Victoria.
The total cost of these additional expenses are estimated at about $1 million.
Rex lost a contract with BHP Billiton to supply the Olympic Dam services to another carrier.
"The loss of the Olympic Dam service resulted in a reduction of overall network yield as the redeployed activity and new routes will not immediately achieve the same yields," Rex said.
Rex shares were down two cents to $1.20 by 1511 AEDT Wednesday.
© 2008
AAP
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