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Deal or no deal, says Rex

Tuesday, 24th March, 2015

Rex might pull some of its flights if its agreement with Council is changed, says Council’s general manager. Rex might pull some of its flights if its agreement with Council is changed, says Council’s general manager.

By Andrew Robertson

Regional Express wants City Council to reaffirm its commitment to a five-year deal that was struck last year under a veil of secrecy.

It follows recent criticism of the agreement by Councillor Peter Black who last month labelled it “a very, very bad deal”.

Under the agreement, Rex guaranteed air services to Sydney, Adelaide and Melbourne in return for an agreed charge for use of the airport.

The terms of the agreement, which came into effect on July 1 last year, have never been made public.

Now Warrick Lodge, Rex’s general manager network strategy and sales, has contacted Council asking it to confirm its commitment to the deal.

He said Rex was willing to terminate the agreement if Council believed it was “not delivering any positive benefit”, according to general manager Therese Manns.

“This request has come as a result of media generated by elected officials in relation to the agreement,” Ms Manns said in a report to Council.

Cr Black has been a vocal critic of the secrecy surrounding the terms of the deal which has been the subject of an ongoing Freedom of Information request by the BDT.  

The councillor also pointed to figures that showed the airport ran at a $123,000 loss in the six months to December last year. 

“The airport is now costing us money. We had a very, very bad deal with Rex, I think we all know that,” Cr Black said last month. 

But in her report Ms Manns warned that Council risked losing more money - and the city some of its hard-won air services - if it decided to pull out of the agreement.

She said while the reintroduction of landing fees would provide an additional $43,000 in income (based on $12 per passenger), it could see Rex pull some services, such as the “underperforming” direct same-day flight to Sydney that was introduced last year.      

“It should be noted that the cancellation of the partnership agreement will result in no security for the number of current flights available or destinations currently on the schedule and therefore passenger numbers cannot be assumed,” Ms Manns said. 

“Should flight schedules be reduced, passenger numbers may be affected and as a result airport income.”

Cr Black yesterday declined to comment on the request from Rex, saying only that Council should wait until the NSW Civil and Administrative Tribunal makes its ruling on the Freedom of Information request before responding.

“I’m looking forward to the decision by the tribunal and the matter should be laid to rest until that time.”

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