Shares in Regional Express Holdings Limited (ASX:REX) fell yesterday after the regional airline operator released a bearish outlook for its industry, despite posting a strong first half result.
In the first half of fiscal 2012 the company’s net profit increased 52 per cent to $13.4 million.
The result was boosted by contributions from its Pel-Air subsidiary on the back of strong demand from the mining sector and the start of the Ambulance Victoria contract.
However, the company says, "The airline environment worldwide is becoming toxic".
As a result, Regional Express Holdings believes that an impending global economic slowdown and the federal government's policies on regional aviation will wipe-out regional air services to all but the biggest regional centers in the next few years.
No dividend has been declared.
