REX Grafton flights could be axed
REGIONAL Express (REX) has warned it may have to cancel some of its regional services as it prepares to deal with a predicted 30 per cent fall in after-tax profits this year.
And, flights in and out of Grafton could be in its sights.
In what could be a bad sign for the future of REX services in the Clarence Valley, the airline did not respond to The Daily Examiner’s approach for answers about Grafton airport.
However in a market statement released by REX earlier in the week, the company’s executive chairman Lim Kim Hai said the possible route closures were a result of rising aviation fuel prices and economic uncertainty.
“The aviation environment this year has been extremely toxic and we have seen all the major carriers in Australia announcing significant declines in profit,” Mr Lim said.
“Looking ahead, we do not see the situation improving much, with both the domestic and international economies threatened with much uncertainty and risk.
“In response to the challenging environment, REX is reviewing its network and may have to pull out of some marginal routes.
“(And) we may have to contemplate retrenchments – something we avoided even in the depths of the global financial crisis.”
Mr Lim said REX was able to take advantage of the Federal Government’s one-off investment allowance during the previous financial year.
He said since that program had finished, however, the price of Singapore jet fuel had risen substantially.
“Regional aviation in Australia is now extremely vulnerable and it does not help that the Federal Government is proceeding with plans to increase significantly the cost burden on regional carriers,” Mr Lim said.
REX is Australia’s largest independent regional airline. Mt Lim said its profit after tax would likely fall to $17.1 million this year.
Qantas, Australia’s largest airline, this week said it would again be increasing its fuel surcharge by 5% in response to rising fuel prices.
REX runs 1300 weekly flights to 35 destinations throughout NSW, Victoria, Tasmania, South Australia and Queensland.