The Regional Express Holdings Ltd (ASX: REX) share price is in negative territory today. This comes after the regional airline operator advised it has revised its interim guidance for the current financial year.
At the time of writing, Regional Express shares are down 1.59% to $1.235.
Regional Express headwinds
In a statement to the ASX, Regional Express announced it will not meet its previously forecasted guidance given on 10 May 2021. The company earlier noted that it expected to break even for the 2021 financial year.
However, after the latest COVID-19 interstate border restrictions and lockdowns, Regional Express has suffered a loss in potential revenue. Forced flight cancellations to and from Melbourne, in particular, has disrupted the airline's recovery from the fallout of the pandemic.
This comes at a time when the company introduced new $39 fares between Sydney and Melbourne to challenge its bigger rival, Qantas Airways Limited (ASX: QAN).
As a result, Regional Express is now projecting a full year statutory loss before tax of around $15 million.
The company also said that it will be refunding affected customer tickets, in line with its COVID-19 refund guarantee policy.
Last month, Regional Express noted that overall demand across its business is sitting at 60% from pre-COVID levels. However, some states in Australia are performing better than others, with Queensland and Western Australia taking the lead.
Operations such as the Coffs Harbour and Port Macquarie route commenced in late March this year. Interestingly, these two regional centres account for around 40% of the total number of passengers in Regional Express' entire network.
Regional Express share price summary
Despite today's slight fall, over the last 12 months, Regional Express shares have climbed around 10%. Year-to-date share price performance has gone in the opposite direction, down more than 40%.
On valuation grounds, Regional Express has a market capitalisation of roughly $136 million, with approximately 110.1 million shares on issue.
