The country airline group recorded a $17.6 million profit for the 2010-11 trading year compared with $24.6m (after tax) the previous year, when it also benefited from Federal Government investment allowance tax refunds.

Climatic catastrophes, including cyclones and flooding in eastern Australia and the volcanic ash cloud which caused a shutdown of airline activity in much of Australian air space for several days, played havoc with Rex's earnings in its second half.

However, revenue growth over the full year for the group's total operations, including Pel-Air, Air Link and the Australian Airline Pilot Academy, lifted almost five per cent and the company achieved a 15pc return on net assets.

And despite tough trading conditions, Rex executive chairman, Lim Kim Hai, is more optimistic and confident of the outlook and potential of the Rex Group "than at any time in the past decade".

A two-year restructure of the Pel-Air subsidiary was almost complete and charter business, including air ambulance contracts, mining industry shuttle flights, freight and defence force work were promising record profitability for that division in the next 24 months.

Rex, which has a fleet of more than 40 Saab 340 aircraft, flies to 35 regional destinations around eastern Australia, also has strong cash holdings, only $29m in debts and a minimal capital expenditure requirement in the coming year.

Rex shareholders will receive a 7.1 cents a share final dividend.