Federal Infrastructure & Transport Minister Anthony Albanese has pushed back on suggestions that the carbon tax and other government policies unfairly hurt an already threatened regional aviation industry.
During remarks to a summit of industry leaders in Canberra on Monday, Albanese acknowledged “some real challenges” to regional aviation in Australia but said the industry as a whole remains strong, with passenger traffic at regional airports growing at a faster rate than at airports in major cities.
Albanese said the cost to airlines from the carbon tax could be passed along to passengers through modest surcharges and would remain a tiny portion of airlines’ operating expenses.
“The carbon price on a regional airfare, depending on the flight length, would be around $1-2 per seat,” he said, citing plans by Virgin Australia and Qantas to impose an average surcharge of $3 and $3.50 to offset the cost of the tax. “I would ask you to recognise that these costs are only a small fraction of the fluctuations in oil prices that you have weathered over the last decade.”
Albanese also defended the government’s decision to let the Enroute Charges Payment Scheme expire on June 30. Established after the collapse of Ansett in 2001, the scheme reimburses regional carriers for the cost of some air traffic control services through Airservices Australia.
Albanese said the scheme, designed as a transitional measure after the Ansett collapse, had outlived its need and dismissed claims that lifting the scheme would make marginal routes unviable.
“The size of the subsidy per flight is on average about $2 per passenger,” he said. “I don’t believe this should affect the commercial viability of any route.”
Regional carriers have stepped up their criticism of government policies in recent months, saying they compound the effects of high fuel prices and will force airlines to abandon less profitable regional routes in favour of routes servicing the natural resources sector.
Regional Express, Australia’s largest independent regional carrier, earlier this month said the federal government’s “draconian policies on regional aviation will no doubt succeed in wiping out regional air services to all but the biggest regional centres over the next few years.”
Albanese said those claims were overblown. “We will certainly not be reading an obituary on regional aviation in this country anytime soon,” he said.
Still, he acknowledged a series of challenges facing the industry. Both the number of regional airlines and regional airports has fallen by half since 1984, he said, while growth has come disproportionately from mining centres and popular tourist destinations such as Ballina and Port Macquarie.
But he said regional aviation as a whole was experiencing strong expansion, with passenger movements through regional airports jumping from 16.8 million in 2005 to 22.5 million in 2010, a 6.1 per cent growth rate that outpaced 5.7 per cent growth at major city airports.
Albanese also defended the government’s handling of the industry, saying the government had committed more than $48 million since 2009 to upgrades of regional airports and airport infrastructure. He announced a further $5.4 million in upgrades at 31 of the country’s most remote airstrips.
“This will keep standards up to scratch and ensure that services such as Australia Post and the Royal Flying Doctor can land and take off safely.”