Carbon tax threatens Australian regional services declares Rex

Regional Express (Rex) has expressed its “strong disappointment” at the Australian government’s announcement of the introduction of a carbon tax on regional air services.

Rex chief operating officer, Chris Hine, observed that regional air services are facing an “avalanche of adverse government measures of which the carbon tax is the latest”. In addition to the carbon tax, Rex highlighted others already recently announced by the Federal Government, including: removal of the en-route rebate scheme for regional airlines; additional fuel excise to increase funding to CASA; and increased security screening at regional ports.

"The combined effect of these measures on Rex alone would equate to at least A$6 million per annum," Hine clarified. "Rex has already announced in its release of 1 June 2011 that the outcome of these measures could be the loss of air services to half a dozen marginal regional ports like Taree and Grafton.

"I foresee many regional operators without the financial strength and diversification of the Rex Group being forced out of business once these take effect after 1 July 2012,” Hine continued. “Those surviving will have to cut back on marginal routes in order to remain in business. This will unfortunately mean that some regional communities will suffer the loss of their essential air services.

"We call on the Federal Government to consult with regional aviation with the hope that the Government will strongly reconsider its position on regional air services before it is too late. Given the extremely fragile state of regional aviation in Australia today, once an operator goes out of business it could become irreversible as the returns are too slim and uncertain to attract new entrants," Hine concluded.

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