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Council pursues Melbourne link

Friday, 4th November, 2011

By Andrew Robertson

City Council will try to entice another airline to Broken Hill to provide a direct service to Melbourne and possibly Adelaide.

The move follows Regional Express’s rejection of the terms of a new partnership agreement offer from Council which included incentives designed to encourage Rex to establish a Melbourne service.

Council’s general manager Frank Zaknich said yesterday the proposed five-year agreement was the longest ever offered by Council and would have given Rex more certainty.

He said in return Council was seeking a commitment from Rex, which already provides services to Adelaide and the non-contestable Sydney route, to establish the new route.

“I can’t go into details because it is a commercial agreement but it recognised the fact that it was a long-standing partnership and factored in some of those incentives to encourage the development of a Melbourne route.”

Rex has received incentives in the form of a reduction in passenger charges since it began operating from Broken Hill almost 10 years ago.

Mr Zaknich said similar incentives were contained in the latest proposal to the airline, and will now be offered to other airlines.

The issue came to light at Council’s ordinary meeting on Wednesday night after a confidential report was discussed in-camera by councillors.

Following the discussion Council revealed it had resolved to seek expressions of interest from other airlines to provide a service between BH and Melbourne.

“We’re essentially testing the market in terms of what interest there is in providing the service on the basis that passenger numbers are steadily growing on an annual basis,” Mr Zaknich said.

“Council recognises that has happened in partnership with Rex, and it would certainly look at having a partnership in the future.

“But obviously the terms suggested weren’t acceptable to Rex and the response wasn’t acceptable to Council.”

Mr Zaknich said previous community surveys, along with anecdotal feedback, gave the Council confidence there was sufficient demand for a Melbourne service.

He said business travel would likely be the main user with tourism being “an additional driver”.

“Part of the proposal with Rex was to do a joint demand assessment and that was included in the five year agreement.

“I think Council put its possible options on the table and the response it received wasn’t acceptable.

“It’s not to say we wouldn’t enter into a future partnership agreement.”

Mr Zaknich said Council’s preference was for a direct route and not via Mildura.

“There’ll be a combination of direct expressions of interest and calling for them publicly as well,” he said.

“We’d like to get something out by the end of the year but again it would depend on timing.

“So it will be interesting to see what sort of response we receive from other providers.”

Rex declined to comment yesterday but a spokeswoman for Qantas Link said that airline did not have any plans to establish a route between Broken Hill and Melbourne.

“Broken Hill, unfortunately, is something we’re not pursuing at this stage.”

Sharp Airlines, which operates in regional SA, Victoria and Tasmania, said it would need to look at the EOI before making any comment.

“I’ve spoken to the management and the owners and they really don’t want to comment until they’ve seen the EOI,” a spokeswoman said.

“We look at everything case by case, and we’re more than happy to look at the EOI.”

The chairman of the Broken Hill Tourism Advisory Board, John Groenindijk, said an air service to Melbourne was long overdue.

“It’s an untapped market and the growth opportunity we have is really in Melbourne.”

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