The Regional Express Holdings Ltd (ASX: REX) share price is on watch this morning following its procurement announcement late yesterday afternoon. At Wednesday's market close, the regional airline operator's shares finished the day at $1.59.
Founded in 2002, Regional Express is Australia's largest independent regional airline that operates more than 1,500 weekly flights across 60 destinations. The company is widely recognised as servicing remote areas within Australia that are not offered by other airlines.
What did Regional Express announce?
The Regional Express share price could be on the move today as investors weigh up the company's latest update.
In yesterday's release, Regional Express advised its subsidiary, Pel-Air, had secured a deal with New South Wales Ambulance (NSWA).
The Fixed Wing Patient Transport Services contract will see Pel-Air provide 5 fixed-wing aircraft, pilots and engineering support. This will enable the aerial transport of NSW Ambulance medical personnel and patients throughout NSW regional communities.
Regional Express expects operations to start on 1 January 2022 and run for a 10-year period.
Pel-Air will assign 5 King Air 350 planes to service the agreement. In addition, 2 Pilatus PC 24 jets will be acquired, replacing 2 King Air 350 aircraft in September 2023.
It's worth noting that Regional Express currently has a similar contract with Ambulance Victoria. That deal, entered in 2009, recently was extended until 2023.
Regional Express chair, the Hon. John Sharp AM commented:
This award is a clear recognition of Pel-Air's undisputed ability to provide safe, reliable and high-quality aeromedical services on fixed-wing aircraft at the most competitive prices.
We solemnly commit to the NSW Government that we will spare no efforts in achieving the satisfaction levels which Ambulance Victoria has experienced for the last decade.
Regional Express share price snapshot
In the past 12 months, the Regional Express share price has gained more than 160% off the back of its COVID-19 lows. However, year-to-date, the company's shares are down more than 20%.
Last December, Regional Express shares hit a multi-year high of $2.50 following an approved investment from Asian company PAG.
Regional Express has a market capitalisation of roughly $175 million, with 110 million shares on issue.
