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Rex’s decision to pull out Whyalla following a row over costs appears to have contributed to the entire council being declared “unsustainable” by the state’s economic regulator.
A new report by the independent Essential Services Commission of SA has said the airport’s poor performance is the primary factor behind the council’s debt, which will see it lose $5m between 2023-24 and 2032-33.
“With airport operations excluded, the council registers a $1.3m surplus over this period,” it revealed.
It comes after the federal government said it would stop funding security screening operations, leading Whyalla to decide to pass on those costs to airlines.
Rex’s subsequent decision to pull out led to a furious row between the regional carrier and the council.
Whyalla Mayor Phill Stone said that the renovations required to support flights without security screening would have been unfeasible, as the city’s airport has only a single gate.
He added the airline was “ignoring the facts of the situation” and added the business’ proposed terminal renovations would have been unfeasible.
Rex hit back, labelling the comments a “deceitful and deceptive” assertion “calculated to hide [a] secret agenda”.
“Rex, more than any other party in Australia, has the most experience in screened and unscreened departures from regional airports and we are intimately familiar with the modifications needed,” said Rex’s national airports manager, David Brooksby.
“We have given a suggestion to Council of a workable solution that would involve works of less than $10,000. This would alleviate the need for Rex passengers to subsidise Qantas operations to the tune of half a million dollars annually.
“Furthermore, when the current Whyalla airport terminal was at the design stage, Rex requested that Council have two departure gates and this request was ignored.”
Mayor Stone is now calling on the federal government to introduce a national levy to more fairly distribute the costs.
Separately, Australian Aviation reported in February how Rex blamed supply chain issues caused by COVID-19 for its decision to extend cuts to regional Saab services until 27 October.
The reductions, announced last year and due to end on 31 March, mostly involve scaling back the frequency of flights.
They include services from Sydney to Coffs Harbour, Orange and Port Macquarie, Melbourne to Wagga Wagga and Port Lincoln to Adelaide.
Rex’s general manager overseeing network strategy, Warrick Lodge, said, “Rex is committed to the rebuilding of its regional network and intends to return to the standard flight schedules from 27 October 2024, subject to the situation improving.”
