In an announcement to the Australian Stock Exchange today, Rex advised that its domestic jet operations were profitable in September. Rex resumed mainline domestic services in February this year, and with rising demand and extra aircraft, it is now well-established in one of the world’s most competitive aviation markets.
New deals are paying off for Rex
Photo: Rex
The success has been driven by strong passenger growth, much of which has come from new agreements with major travel agency groups. In June, Rex announced it had signed agreements with five of Australia’s largest travel groups, including a ten-year deal with Flight Centre to be its partner of choice. Others joining with Rex were Webjet, Corporate Travel Management, Helloworld and Consolidated Travel. These agreements came into force from July 1st, with Rex forecasting it would more than double annual jet revenues in 2023 with no increase in fleet size.
After weathering the pandemic and launching Boeing 737 services, Rex is carving out its niche in the domestic jet market. Executive Chairman Lim Kim Hai said the shift into profitability was foreshadowed in June when Rex predicted these new agreements “would very quickly translate into strong passenger and revenue growth.” He added,
“True to form, our domestic jet network passenger numbers for the first three months of this FY [July-September] grew by 60%, 34% and 77%, respectively, when compared to June 2022. Revenue growth has been even stronger at 84%, 47% and 137% for the same three months, suggesting significant yield improvements.”
Rex is still Number 1 for OTP
Photo: Rex Airlines
Also released today was the monthly Domestic Airline On Time Performance report by the Bureau of Infrastructure and Transport Research Economics (BITRE). Rex has retained its number one position for both arrivals and departures on-time performance (OTP). The official Australian government figures show that in September, Rex got 75.1% of its flights away on time, ahead of Qantas (69%), Virgin Australia (66.7%) and Jetstar (57.5%). Rex also led arrivals with 73.3% on time, compared to Qantas with 69.2%, Virgin Australia 68.2% and Jetstar 60.4%.
Apart from Jetstar, with a disappointing 9.5% of flights canceled, overall cancelation rates have improved. With 2.0% of flights canceled, Virgin Australia pipped Rex (2.3%) for the top spot, with Qantas third at 2.5%. Before the pandemic, the route between Melbourne and Sydney was the second busiest in the world, and on this service, Rex really stands out for performance. It departed 95.9% of flights on time, 25.1% ahead of its nearest rival, Qantas at 70.8%, with Jetstar managing just 53.7%. It was a similar picture with arrivals, with Rex at 93.1%, Qantas 69.5%, Virgin Australia 66.9% and Jetstar 59.1%.
Looking for more 737-800s
Photo: Rex
Rex is currently operating all seven of its Boeing 737-800s on Melbourne, Sydney, Adelaide, Brisbane, Canberra and the Gold Coast routes. Its domestic and regional services cover 58 destinations across the country, with regional routes served by a fleet of 61 Saab 340 aircraft. The airline is looking for another two Boeing 737-800NG aircraft to expand its domestic jet services, particularly as the peak holiday season is just around the corner.
Rex has already given guidance that it expects to be profitable for the financial year 2023 (July 2022-June 2023), and Lim Kim Hai said the current results have “further strengthened its conviction.”
“October 2022 appears to be even stronger than September 2022, with passenger numbers on the jet network 16% higher for the first half of the month when compared with the previous month while revenue increased 35% on 13% more flying.”
In the post-pandemic environment, Rex has somehow managed to do what most airlines have not, which is to deliver high-quality performance and make a profit. That’s a rare combination at the moment.
Have you traveled on a Rex 737, and if so, what did you think of it?