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The Productivity Commission is looking into affordability in regional aviation following last year’s White Paper, Transport Minister Catherine King has said.
Speaking to ABC Radio in Coffs Harbour this week, Minister Catherine King said there have been several ideas floated to address the problem of high regional airfares, but “none of them are easy”.
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“There’s views about how you actually deal with the costs of security and ongoing security at regional airports. A lot of these airports are owned by local councils as well … often they are struggling with some of the costs of the security and ongoing costs of that,” she said.
“And also, then, do you cross-subsidise regional flights with a levy on other tickets across the country? So, it’s been lots of ideas floated.
“We’ve asked the Productivity Commission to have a bit of a look to see whether there’s any practical policy solutions we can think of that try and maintain the sustainability of regional aviation whilst looking at some of the cost pressures we’ve got.”
According to the minister, large price differentials between regional airports are often “about volume and how the airlines recoup their costs”.
“Obviously, the longer and further you fly, there’s fuel costs associated with that, but largely it is about volume and demand. So it’ll be the numbers – they often cross subsidise flights, so that’s always challenging.”
“And then, also, the lack of competition – that’s why it’s been important to try and keep Rex in the market, because once you’ve only got one player, then that does make it very difficult.”
An alliance of regional NSW cities earlier this year lobbied the NSW state government to implement a similar scheme to Western Australia’s Regional Airfare Zone Cap (RAZC), which has subsidised more than 500,000 seats over the last three years.
In a pre-budget submission, Regional Cities New South Wales, an alliance of 15 regional centres across the state, asked for an RAZC in NSW as well as the provision of funding “on an ongoing basis” for regional airport infrastructure.
“The importance of our regional aviation infrastructure was clear during last month’s flood emergency when roads and highways were cut, isolating many communities,” RCNSW chair councillor Steve Krieg said.
“We have asked the Minns Government to increase its support for regional aviation and provide funding for regional aviation on an ongoing basis. This will allow our Regional Cities to invest in and maintain their airports, aerodromes and airstrips.”
