Business

REX warns of 'cataclysmic period ahead' for airline

DESPITE posting the biggest profit of any airline in the country, REX warned shareholders this week of an impending hit of more than 25% from government taxes including the carbon tax.

REX, which operates some 1300 weekly flights to and from 35 regional Australian towns and cities, held its annual general meeting on Tuesday.

Releasing the company's full year financial results earlier this year, executive chairman Lim Kim Hai warned of a "cataclysmic period ahead".

He said the collective effects of the en route rebate scheme, carbon tax, and additional security charges, were likely to hit the company's results for 2012-13 for between $4 million and $5 million.

But in a stock announcement last week, it seemed the company's services to the New South Wales north coast is not under threat, securing the state contract for flights between Grafton and Taree to Sydney.

While the company is the biggest beneficiary of the State Government regulation of flight routes, it again called for the licensed route regime to be scrapped to allow for free competition on the regional flights.

Nationals's Leader Warren Truss said the imposition of the carbon tax in particular was making a "bad situation worse" for the regional airline.

He said he was concerned the tax was posing an unfair burden on people in regional and remote areas who travelled by air.

"It becomes a de facto financial penalty for regional communities and further isolates those who can't afford the extra cost of flights," he said.

Topics:  rex airlines



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