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Airline targets Council over passenger tax hike

Monday, 14th April, 2014

By By Michael Murphy

A war of words has erupted over a proposal to increase passenger taxes at the local airport.

Regional Express (REX) launched a stinging attack on City Council over the weekend, saying Council’s proposed tax hike was “irresponsible” and “greedy”.

But Council hit back at the regional airline yesterday, saying it was trying to “bully the community” with its threats to pull air services.

Council has proposed to raise the tax from $12 to $12.30 for each arriving and departing passenger next financial year.

It is currently calling for comment on its draft schedule of fees and charges for all council services, which includes the passenger fee.

“BHCC’s latest proposal is irresponsible and myopic in light of the pandemic crisis in Australian aviation,” said Warrick Lodge, REX’s General Manager of Network Strategy and Sales, in an open letter to the council.

Rex’s profits fell 45% in the last financial year, and dropped a further 60% in the first half of this financial year, he said.

Mr Lodge said REX had invested heavily in its Broken Hill operations over the past decade while Council’s passenger tax revenue had grown well above the Consumer Price Index.

“BHCC’s proposal is a blatant greedy grab for money, totally ignoring the stark economic realities of regional aviation,” Mr Lodge said.

“Rex requires BHCC to revert to the terms of the latest five year partnership agreement which was terminated in October 2012 because of BHCC’s hostile stance against Rex.

“Otherwise, BHCC will have to take responsibility for the irreparable damage to Broken Hill air services which could include Rex withdrawing from the NSW route licence scheme for the Broken Hill to Sydney route.”

Council’s General Manager Therese Manns said she wrote to REX in late March requesting that they consider establishing a new partnership agreement with Council, but REX did not respond.

“Seems a bit of a no-win situation to me,” Ms Manns said.

“I can honestly say, I have never started a partnership discussion with one party saying ‘do what we say, or we will hurt you’, which is basically the spirit Rex has taken,” she said.

“Threatening to pull air services unless the community supports lower head taxes - while aiming to pit the community against Council - I believe is an insult to the spirit and strength of the people of Broken Hill. 

“Maybe it’s time the council and the community stood together and asked Rex to sit at the table, have a conversation and try and develop a rewarding and respectful partnership for all.”

She said the fees and charges within council’s draft schedule have increased in line with CPI, as have all other charges which are billed to residents and other parties for services provided by council.

Council’s draft schedule of fees and charges is available on its website.

It is taking submissions about them until April 24.

Council will consider feedback as part of its draft budget process, expected to be completed in May.

READ REX’S OPEN LETTER: READERS’ WRITE PAGE 6 OF TODAY'S EDITION

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