Rex - Regional Express (ZL, Wagga Wagga) has called upon the Australian federal and state governments to show more restraint and "be more discerning" in funding regional airport investment projects as spurious subsidies may lead to increases in airport charges and subsequent termination of services by local carriers.
"It is disappointing to see that the majority of the government subsidies for regional airport refurbishment are granted without any inputs from the only carrier which services the airport. This has often resulted in the carrier withdrawing all or part of its services when the airport charges become unviable economically", the Australian regional specialist said.
The carrier has recently been involved in a dispute with the Taree airport where the government had invested AUD4.2 million dollars (USD3.1 million) in what REX saw as unnecessary improvements of the facility while refusing to invest additional USD1,000 in a much-needed three-phase power outlet. Eventually, REX scrapped its Taree services in January 2018.
"Over the past 16 years, REX has seen its operating costs increase significantly, particularly with the costs imposed by Local Government for the essential use of regional airports. The most significant factor contributing to the escalating airport charges has come about by irresponsible and grandiose spending on regional airports to construct excessive facilities that provide no meaningful improvement to the air service, but add significantly to the operating costs as well as increasing significantly the annual depreciation expense which is then charged back to the airline through increased airport charges," REX has added.
According to the ch-aviation capacity module, the carrier currently serves 58 Australian airports, most of them - with the exception of large hubs such as Sydney Kingsford Smith, Melbourne Tullamarine, Perth International, and Adelaide International - small regional facilities where REX is either the sole or at least the dominant operator.
