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Country airlines ‘let down’

Friday, 19th September, 2014

By Michael Murphy

A federal government subsidy announced this week for regional airlines was "disappointing", Regional Express Airlines said yesterday.

The company that provides Broken Hill's air link to Adelaide, Melbourne and Sydney said the "token amount" offered by the government would not prevent the further loss of regional services to many parts of Australia.

Deputy Prime Minister Warren Truss announced the return of the "Enroute Charges Payment Scheme" on Monday, part of an election promise to "support vulnerable
air routes" to regional communities.

"Part of the assistance will go towards additional support for new routes to communities that have no passenger services at all," Mr Truss said in a statement.

Under the scheme, the government would provide $1 million each year over the next four years to help new routes or those with less than 15,000 passengers per
annum.

REX said yesterday it was still reading the fine print and did not know if it applied to routes to and from Broken Hill.

Chief Operating Officer Neville Howell said the amount offered by the federal government in the new scheme represented 15 per cent of the previous scheme.

"The low threshold of 15,000 passengers per annum means that most of Australia's regional routes are not eligible for the rebate," Mr Howell said in a statement.

"It is disappointing that the government is doing so little to help regional aviation when 16 regional airlines have collapsed in the last 12 years.

"Given the current aviation crisis in this country, more will collapse, and the token amounts will not stem the permanent loss of regional services to many parts of regional Australia."

REX was examining the eligibility of all its routes under the scheme and will submit an application for funding for those that qualified.

REX has been Australia's most profitable airline group for the last three years.

Last financial year, it managed to squeeze out a before tax profit of $10.7 million, as major player Qantas plummeted to a $2.8 billion loss, the worst in its 92-year history, and Virgin Australia posted a $356 million net loss.

Though REX remained in the black, its profit was down about 45 per cent from the previous year. Broken Hill City Council and REX struck a five-year deal in May, relating to air services in Broken Hill.

The deal included an additional service of an early morning direct flight to Sydney after July 2015. No other information was released about the agreement.

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