Struggling Rex part of 'haemorrhaging' aviation industry

REGIONAL Express has warned its first-half profits will slump due to fewer business travelers, and urged the Abbott government to intervene to help an aviation industry that is ''financially haemorrhaging and approaching collapse''.

Days after Virgin Australia was forced to confirm it would post a large half-year loss, the nation's largest independent regional airline has forecast a fall in pre-tax profits by 60 per cent to about $5 million for the six months to December after business travel ''really plummeted''.

Leisure travel also declined slightly during the first half, a period when Australian airlines typically make the bulk of their earnings.

Rex chief operating officer Garry Filmer said regional airlines were harder hit than Qantas and Virgin, which would both post big half-year losses.

''The entire aviation industry is financially haemorrhaging right now and approaching collapse. Regional aviation is even harder hit [than large domestic airlines] as the profit margins are slimmer,'' he said.

''We have already seen the collapse of two of Australia's oldest regional carriers during this financial year, Aeropelican and Brindabella.''

Mr Filmer urged federal Transport Minister Warren Truss to make ''immediate and forceful efforts'' to fulfill his pre-election commitments to regional aviation.

''The Abbott government to date has not made any significant inroads to reversing the devastation inflicted to the economy by the previous government,'' he said.

''Many regional carriers have little time left before they face the same fate as Brindabella. For many parts of regional Australia, this would spell the end of regular air services forever and it would be ironic if it were the Nationals that presided over this outcome.''

Rex was a vocal critic of the previous Labor government, especially its tax on carbon emissions.

The airline is majority-owned by a group of Singaporean businessmen, and its deputy chairman, John Sharp, is a former Howard government transport minister.

It has faced stiffer competition in the past year from QantasLink and Virgin's regional operations.

Rex's plea for intervention comes as Qantas renews lobbying for financial help.

Qantas has been at pains to distinguish itself from other companies which unsuccessfully sought government assistance such as SPC Ardmona and Holden.

Australia's largest airline has warned it will post a half-year loss of up to $300 million and lay off at least 1000 workers this year.

CIMB analysts have estimated that Qantas' run of losses will continue until 2015-16.

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