Regional Express profit dives 14pc
FALLING passenger numbers due to a downturn in the mining sector have caused a 14 per cent profit fall for airline Regional Express.
Passenger numbers in the year to June were down 0.8 per cent from the previous year, even though the company added five additional routes in Queensland under a new government contract.
Higher engineering costs also contributed to the decline in profit to $6.67 million. Executive chairman Lim Kim Hai blamed a deteriorating economy for the downturn in profit, with commodity prices falling, retail spending weak and unemployment on the rise.
“With such weak business sentiments, the expected bottoming of Rex’s decline in passenger numbers did not materialise and the year saw another decline, albeit much smaller than previous years,” Mr Lim said.
The airline has good prospects for growth in north Queensland after winning the State Government regulated routes tender, and plans to expand further into Cape York and the Torres Strait, he added.
A decision on dividends has been deferred to the company’s annual general meeting in November due to falling profit and uncertain economic conditions.
Rex shares were down 4.5 or 4.8 per cent, at 90 .