Why did REX (ASX:REX) shares nosedive 33% in 2021 while Qantas edged higher?

What happened to Regional Express in 2021? We take a closer look

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The Regional Express Holdings Ltd (ASX: REX) share price suffered massively in 2021 as COVID-19 continued to impact the travel industry.

Shares in the airline dropped a mammoth 33% during the year, falling from $2.06 to $1.38. In contrast, the Qantas Airways Limited (ASX: QAN) share price gained 3.3% in the same time frame.

Let's take a look at what weighed on the REX share price in 2021.

Covid-19 travel bans

It was a tough year for the REX share price as the airline dealt with COVID-19 travel bans. However, the final few months of the year provided relief overall for the company's shareholders.

The company's shares dropped nearly 46% between the start of the year and their low point of $1.12 on August 26. Meanwhile, Qantas edged higher from $4.85 to $5.05 during this time, a 4% rise.

After hitting their yearly low, REX shares bounced back to $1.38 on 31 December, a 23% recovery. In the same time frame, Qantas shed 0.6%.

There were a number of low points that hurt the REX share price. These included the company predicting a loss of $15 million before tax for FY 2021, as interstate border restrictions during Covid-19 adversely impacted the airline's revenue projections. Then, in early August, the company further downgraded its revenue forecast to predict a loss of $18 million. The company attributed these losses to the Sydney lockdown and announced it would temporarily stand down staff.

Then came the fightback. In late August, REX released its full-year results. Management kept costs down by 20.9% compared to the previous year.

In September, the airline revealed its staff stand-downs and service suspensions would continue. Despite this news, the share price continued to rise. Hope that borders would open once the population reached 80% vaccination may have been on investors' minds.

In October, the REX share price continued to shine. News that flights between Sydney, Melbourne, and Canberra would resume helped drive this recovery.

However, between 1 November and 31 December, the REX share price fell nearly 14%. This was despite the airline announcing it would fly between Brisbane and Sydney and winning a new regulated flight path in Queensland.

Despite the company launching this new interstate flight route in late December, wider Omicron fears continued to impact ASX travel shares including REX. A Tourism and Transport Australia Forum survey revealed four out of five Australians had either cancelled, or were unsure about, their summer travel plans.

REX share price snapshot

Over the course of the year, the REX share price performed 46% worse than the  S&P/ASX 200 Index (ASX: XJO), which gained 13%.

The airline has made a steady start to the year, with its shares currently down just 0.3% to $1.38 apiece.

REX has a market capitalisation of about $151 million based on the current share price.

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