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

| More on:
ASX 200 travel shares A man sits on a suitcase with his head in his hands as a plane flies overhead

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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 over ten 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. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 3 April 2025

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 Share Fallers

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Austin Engineering, Magnetic Resources, Meridian Energy, and Minerals 260 shares are tumbling today

These shares are missing out on the good times on Thursday.

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Mineral Resources, Polynovo, Regal Partners, and Santos shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AMP, Brickworks, HMC Capital, and Platinum shares are falling today

Not all shares are rebounding with the market on Tuesday.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Capricorn, Nuix, Westpac, and Woodside shares are sinking today

These shares are starting the week deep in the red. But why?

Read more »

5 arrows going down with a red background.
Share Fallers

11 popular ASX 200 shares crashing to multi-year lows amid market carnage

Bank shares, mining stocks, and technology stocks are among those crashing to multi-year lows today.

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Share Fallers

Why Amotiv, Breville, Life360, and Woodside shares are tumbling today

These shares are having a rough finish to the week. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ANZ, Breville, Cettire, and Treasury Wine shares are dropping today

These shares are having a tough time on Thursday. But why?

Read more »

A man sitting at his desktop computer leans forward onto his elbows and yawns while he rubs his eyes as though he is very tired.
Share Fallers

These were the worst ASX 200 shares to own in Q1 2025

Let's see why investors were selling off these shares during the first quarter.

Read more »