King Island airport crisis

Council and airline at loggerheads

KING Island Council has accused a regional airline of “holding a gun to the head” of its remote Bass Strait community.

On Monday, the council received a letter from Regional Express Holdings with its response to changes to the island’s refurbished airport fees and charges schedule.

The council is raising landing charges from $20.97 to $25, excluding GST, per tonne of maximum takeoff weight. For REX this will mean an increase of $53.02 per landing.

It is also introducing a $7.50 per passenger per leg charge. Local residents can claim a rebate from the council.

The council claims REX has threatened to adjust its ticket prices and flight schedules in a way that will hurt the island’s residents and economy. It says the changes would bring King Island Airport into alignment with the rest of Australia, rather than operating as an exception to the rule, at significant cost to the community.

“It comes after two years of communication with REX on the required alignment of King Island Airport and a directive set out by the Auditor General to get the airport to break-even and beyond — a far cry from the loss in 2017-18 alone of $470,000,” the council said.

“In contrast, REX, which has headquarters in Singapore, reported a 60 per cent increase in profit for its half yearly results listed in February 2018.”

The council says the airline had been “heavy handed” in its response by “putting a gun to the island’s head by trying to dictate commercial arrangements”.

King Island Mayor Duncan McFie asked REX executive chairman Lim Kim Hai to visit the island to resolve the issue.

In a letter to council general manager Tony Brice, Mr Kim Hai said: “I think the council is the real bully in this case as you are misusing the monopoly powers to impose on the airlines,’’ he said . “We will refer you to the Productivity Commission and we will also continue to report you to the community as we think that your leadership is doing a real disservice to the community, and the ratepayers need to know the consequences of your actions.

“REX would be happy to discuss with the management and councillors of King Island if there is genuine desire to want to forge a true partnership with the airline.

“Otherwise we cannot stop you from carrying out your illconceived plans, but I am giving you a solemn warning that this will surely lead to a disastrous outcome for the community.”