Following the District Council of Lower Eyre Peninsula’s refusal to co-invest with Regional Express (Rex) in enhancing Port Lincoln’s air services, Rex will not be introducing additional flights including the much requested early morning Port Lincoln to Adelaide service.
Rex’s Managing Director, Geoff Breust, said the airline had commenced discussions with the District Council in June this year with the aim of establishing a partnership approach for the future development of the service.
“Rex and the majority of local councils who own and operate airports on our network have entered into very successful partnerships to grow and develop their community’s air service and the airport facilities. Such partnerships include co-investment by the airline and the council in maintaining fares at levels which induce more and more people to use the service. As a direct result Rex has been able to grow passenger numbers, in some cases by over 70 percent in three years, and increase frequency of services on many routes resulting in benefits to all stakeholders – the council, the airline and most importantly, the community.
“Rex and before it Kendell Airlines have operated to Port Lincoln for over 20 years. In that time we have seen many airlines come and go including Qantas which withdrew after only six months of operations – the shortest time ever on a domestic route. This is a major message that regional air services are marginal and extremely difficult.
“Rex has maintained its approach of providing reliable and convenient services at very affordable prices. Our average fare on Port Lincoln right now is lower than it was in the first half of this year when there was competition. In fact, Rex’s average ticket price inclusive of fuel levy is today lower than the average ticket price of four years ago when the fuel levy did not exist.
“Rex has been the primary catalyst in growing the Port Lincoln route to record levels of 140,000 passengers annually. Rex is now operating more services than ever before with 102 flights each week between Port Lincoln and Adelaide.
“Over the last four years Rex has invested considerably and taken large risks to provide Port Lincoln with an air service unparalleled anywhere in the world for a town and regional community of this size. During this same time the District Council’s annual revenues from the airport have soared 50 percent to more than $900,000 – not bad considering most councils have had to subsidise part of the $250,000 in annual operating costs required to maintain a regional airport like Port Lincoln so that air services could be maintained.
“In spite of this, the District Council has refused to re-invest a small part of this windfall to co-finance the additional services that the business community had been crying out to have for so long. Council’s counterproposal essentially locks in a guaranteed increase in revenue for itself year after year while Rex risks millions in up-front investments.
“Council has expressed its view to Rex that it intends to run the airport as a commercial venture. This approach disregards the significant economic and social benefits that air services bring to the community.
“In the light of the singular position adopted by the District Council, the Board of Rex has directed its management to divert the aircraft and resources that were earmarked for the additional services in February next year to other towns which have embraced the partnership approach. Also the existing Port Lincoln services will be reviewed to satisfy strict commercial benchmarks.
“It is unfortunate that the Port Lincoln regional community and air travellers in particular will be significantly disadvantaged as a result of the District Council’s response.
“It is now up to the District Council to account to its constituents for the consequences of its decision. However, Rex would be happy to re-examine a partnership approach where and when there is a true understanding by the District Council of the benefits of the partnership approach we have offered in the context of today’s fragile dynamics of regional aviation.”
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