Regional Express (ASX:REX) share price edges lower on revised guidance

The regional airline operator shares are in the red today. We take a closer look into the company’s latest release…

| More on:
qantas pilot putting hands to her face as if distraught

Image source: Getty Images

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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Travel Shares