Silver lining seen in island’s airline fight

TASMANIA’S tourism industry hopes the airline dispute on King Island is resolved before peak season and for it to trigger a broader discussion about the viability and future ownership of the state’s small regional airports.

A stoush between Regional Express and the local council over new passenger and landing fees at King Island’s upgraded airport has come to a head with the carrier ready to cancel two of its weekly flights between King Island and Melbourne from next week.

More cuts in passenger services to the remote golf and food mecca are looming and at least one airfreight carrier is looking at the future of its services.

Tourism Tasmania chief executive John Fitzgerald was appointed by the State Government last week to work as a facilitator between the parties. It is understood Mr Fitzgerald has already met with the council and will talk to Rex soon.

Tourism Industry Council of Tasmania chief executive Luke Martin says he hopes the dispute is soon sorted. He also wants it to spark a broader discussion about the viability of regional airports in Tasmania.

“There is no clear bad guy in this dispute but it is obvious the small rate bases in these communities cannot support the significant infrastructure which in turn supports tourism growth,” Mr Martin said.

“I wonder if there is merit in TasPorts looking at such air- ports — on King and Flinders islands and at Strahan — to see if it is better equipped to take them over.”

A Government spokesman yesterday said the government acknowledged the significant importance of reliable and cost-effective aviation services to regional communities and particularly to King Island.

“The viability of regional airports is an issue of national significance with the issues facing King Island Airport not dissimilar to those facing other regional airports around the country. The Government is communicating these concerns at the national level and is keen to be involved in a discussion around improving the viability of regional aviation,” he said.

The standoff between King Island Council and Rex started when the council decided to introduce a passenger fee and increase landing fees to try to stem the $460,000 loss it posted on the airport last financial year.

The new charges will also stop the total cost of its airport upgrade falling on its small rate base of about 1600 residents.

The increases come into effect on October 1.

The council’s stance has been supported by Air Services Australia, which has accused Rex of being heavy handed. The organisation said small communities around the nation could not continue to support the commercial activities of profitable airlines.

King Island Mayor Duncan McFie and general manager Troy Brice are also lobbying for a Tasmanian inquiry into what they say are regional airline “price gouging.”

On Flinders Island, the airport runway needs a major upgrade and while it is listed as a priority council project, Mayor Carol Cox says it is beyond the resources of her community.

The airport is already incurring an annual operational deficit of $180,000. The cost of reconstructing and sealing the runway is an estimated $3 million, and rebuilding and realigning it would cost $15 million.

Rex is one of three commercial passenger airlines that service King Island.

The Tuesday and Wednesday flights it will cut from Tuesday carry about 3000 passengers a year.

The situation came to a head at end of last month when a planned meeting between the two parties was cancelled.

Rex then said its reduction in services was permanent and warned further cuts would be “extremely likely” depending on the future commercial performance on the route and any further increases in airport charges being planned by the King Island Council.

“Twenty regional airlines have gone into administration in the last 15 years, such is the reality of regional aviation, and increasingly small regional communities are facing the prospect of never ever having a reliable ... air service,” Rex said.

“The King Island community is very lucky to have Rex stick by it faithfully and continually over the past 38 years and it is most unfortunate that it may not realise how much of a good thing it has until it is permanently lost.”

Business groups on King Island did not want to buy into the argument between the council and the airline.

There is no clear bad guy in this dispute but it is obvious the small rate bases in these communities cannot support the significant infrastructure — LUKE MARTIN