Regional Express reports 4% drop in passenger traffic.
Regional Express executive chairman Lim Kim Hai has just warned of potential regional route cuts, as the group reported a first half FY 2011/12 profit before tax of $18.5 million on a turnover of $139 million.
Lim said that its subsidiary Pel-Air had contributed strongly to an improved outcome, fueled by strong demand for charters, “however the situation with the passenger airline services operated by Rex was less rosy.”
Passengers numbers have continued to decline at a rate of almost 4%, which is on par with the previous year, while costs per Available Seat Kilometres rose 8% “primarily due to soaring fuel costs,” Lim said.
He said the government’s carbon tax and cost increases on regional operators will add to Rex’s woes in the future.
“The impending global economic slowdown and the Federal Government’s draconian policies on regional aviation will no doubt succeed in wiping out regional air services to all but the biggest regional centres over the next few years,” he said.
Lim warned that in the absence of “a more favourable environment” Rex would be compelled to divert its resources from marginal routes to mining charter services.
More information in today’s Travel Daily.