Smaller regionals serving outback Australia are in trouble, but so far the government has not decided to help them despite pleas from airlines.
A parliamentary transport committee warned last December that an aviation crisis was building due to the poor economics of serving small communities, coupled with taxes, regulations, and a lack of efficient aircraft for small routes. One committee member warned that a loss of these services could "set this country back 50 years".
Australia does not subsidise air service to rural areas except for a few remote aboriginal settlements. As a result, the number of regional airports with scheduled services has dropped from 251 in 1986 to 156 by last October. Brian Candler, chief executive of the Regional Aviation Association of Australia (RAAA), predicts: "At this rate, in the next five years another 25 communities could lose their air service."
This has prompted the RAAA to make an unprecedented request for government aid in the form of a A$15 million ($10 million) subsidy over three years to carriers operating aircraft with no more than 19 seats, plus another A$15 million in tax and fee rollbacks. Candler warns: "We're fairly well backed into a corner."
Transport minister John Anderson is to consider the request, but the government's budget already provides for regional aviation. But Candler says that most of that budget is for unrelated services or involves funds raised by fuel taxes. "So it's industry funded, not budget funded," he claims. Candler is not optimistic. "We just haven't found out yet where to push the button."
Source: Airline Business
