Regional airline Rex has cut its full year profit guidance because it says is federal government measures such as the carbon tax are hurting the economy.
Rex on Tuesday said its profit before tax in the 2012/13 financial year was set to fall by 25 per cent to 35 per cent from the previous year's $35.1 million.
The company had in August forecast a profit fall in the range of 15 per cent to 25 per cent, due to the impact of the carbon tax, the end of a rebate scheme for air-traffic control charges and additional security costs.
"As foreshadowed in our earlier warnings, the government's slew of draconian measures at the start of this FY (financial year) is having its expected impact on the general economy which in turn is hurting regional aviation badly," chief operating officer Garry Filmer said on Tuesday.
Rex shares dropped 5.5 cents, or 4.7 per cent, to close at $1.11.
The airline flies to 35 regional destinations in Queensland, NSW, Victoria, Tasmania and South Australia.