Rex - Regional Express (ZL, Wagga Wagga) has announced it would terminate its Mildura-Sydney Kingsford Smith route on October 27, 2018, after the airport decided to steeply increase its passenger fees.

"This increase is a blatant money grab and in breach of on-going commercial agreements. At the recent Board meeting, the Rex board directed an exit of the Mildura to Sydney route and to undertake a further review of the Mildura to Adelaide route at the next board meeting in late November 2018," General Manager (Network Strategy and Sales) Warrick Lodge said.

The airport in northern Victoria announced earlier that it would increase its passenger fees by 22.5%. After an initial outrage by the airlines, Mildura decided to drop the hike for all routes except for Melbourne Tullamarine, where fees are due to increase by 13.7%.

REX said it would redeploy the aircraft and slots at Sydney airport to the Sydney-Griffith route, where it has an amicable relationship with the local authorities. The carrier also said that it was no longer prepared to provide services which make no commercial sense.

"The REX board has directed management to prioritise its scarce pilot resources to routes where the regional airport does not abuse its monopolistic position by treating the airport as a cash cow to finance inefficiencies elsewhere. For routes where the airport owner is abusing its monopolistic power, REX will no longer be adopting a holistic approach in providing services to the route. For these routes, REX will adopt a wholly commercial approach and part or all of its services will be reallocated if there is another more profitable option," Lodge said.

The regional specialist is the main operator at Mildura. According to the ch-aviation capacity module, it currently operates 41 weekly departures, including 18 to Melbourne, 11 to Broken Hill, and six each to Sydney and Adelaide. The route to Melbourne is also served by Qantas and Virgin Australia International.