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REX claims Federal Govt is 'destroying regional aviation'

REX airlines.
REX airlines.

THE executive chairman of airline Regional Express has launched an extraordinary attack on the Federal Government, claiming it appears "hell-bent on destroying regional aviation".

Lim Kim Hai's anti-government tirade came as the airline announced it had posted an after-tax profit of $14 million in 2012/13 - down 45% on the previous year.

Rex, which operates a fleet of more than 40 Saab 340 aircraft to 35 destinations in five states, said the introduction of the carbon tax had helped create "one of the most toxic environments ever to face aviation in Australia".

The company was eager to blame its fall in profit on the introduction of carbon pricing, which came into effect on July 1 last year.

It paid $2.4 million in carbon tax costs, but said it had also affected consumer spending.

Rex's revenue was down 5% for the year to $258 million, with passenger numbers dropping 6.8%.

"We saw sales plunge almost immediately from July 1, 2012 after the Federal Government's carbon tax was implemented, together with a whole host of policies hostile to regional aviation," Singapore-based Mr Hai said in a statement.

"Minister Albanese's claim that the impact of the carbon tax would be little more than the cost of a cup of coffee became the understatement of the aviation year, when both businesses and households cut back on flying due to the rising costs in the economy."

"REX is a very efficient, formidable and operationally excellent airline. However, there is little we can do when the Federal Government appears to be hell-bent on destroying regional aviation and along with it, pretty much the rest of the economy."

Despite the gloomy rhetoric Rex revealed it was pressing ahead with a $50 million investment in the business this year. Shareholders will not receive a final dividend "in light of the huge capital needs".

Mr Hai's attack came as Qantas also revealed carbon tax costs had driven up its operating costs by $106 million in the financial year.

Qantas recorded a modest after tax profit of $6 million - a $250 million turnaround after posting an historic loss just 12 months earlier.

The company said carbon pricing added $77 million to its Qantas Domestic operations and $29 million to budget airline Jetstar.

In a statement, Qantas listed the carbon tax, which came into effect on July 1 last year, as one of the "negatives" to have impacted on the company's before tax profit of $192 million. The others were costs associated with the company's Dubai hub transition, pilot back-pay and additional start-up losses in Jetstar's new ventures in Asia.

If Labor manages to win another term it will scrap the carbon tax in July next year - a year earlier than planned - in favour of an emissions trading scheme.

Mr Albanese told APN Newsdesk the long-term outlook for regional airlines was "positive", citing emerging opportunities to expand their operations and grow profits.

"But don't take my word for it. Prior to the introduction of the carbon price Mr Hai told the Australian Stock Exchange: 'I am actually more optimistic and confident of the outlook and potential of the Rex Group than I have ever been for the past nine years.'," Mr Albanese said.

"In anyone's language, that's a very positive take on the future."

Topics:  anthony albanese carbon pricing federal government qantas rex


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