Newspaper article The Northern Star (Lismore, Australia)

Rex Fearful over Airport Upgrades

Newspaper article The Northern Star (Lismore, Australia)

Rex Fearful over Airport Upgrades

Article excerpt

Byline: Cathy Adams

REX Airlines claims "grandiose" spending on upgrading some regional airports is threatening the viability of regional air services.

When asked if the airports in Lismore and Ballina were among those accused of excessive upgrades, the company declined to say, saying instead it supported "rational airport upgrades".

In a statement, the airline said while it supported rational upgrades, it was concerned government funding was being used in some cases to provide facilities that were excess of need, resulting in increased costs to airlines and passengers.

"This could be in the form of grandiose terminals or extension of runways when the current ones could easily support three times the current passenger numbers," the statement read.

"This results in ongoing airport costs, depreciation, operating and maintenance costs spiralling out of control. This in turn puts upward pressure on airport charges and regional ticket prices."

Rex called on the state and federal governments to consider the impact on carriers when allocating funding, saying failure to do so "has often resulted in the carrier withdrawing all or part of its services when the airport charges become unviable economically".

The airline gave the example of Kangaroo Island airport.

"More than $20 million of taxpayer funding has been spent on upgrading the airport with annual passengers barely exceeding 50,000," it said.

"Rex is deeply concerned that in the future the airport will pass the depreciation expense to passengers.

"Fewer passengers will travel and in turn the remaining passengers will face even higher ticket prices, causing a downward spiral in passenger numbers to a level where the regional air service is no longer viable.

"State and federal governments should also exercise more economic discipline in evaluating requests for funding otherwise the funding could result in a white elephant or, worse still, in killing off the very service that the funding is meant to facilitate. …

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