Regional Express Takes Aim At Carbon, Fuel Excise Taxes And Tightened Security

Australia's Regional Express (Rex) has expressed its strong disappointment at the recently announced carbon tax levy on regional air services.

Chris Hine, Rex Chief Operating Officer, said on Monday that regional air services are facing an avalanche of adverse government measures of which the carbon tax is the latest. In addition to the carbon tax those already recently announced by the Federal Government include:

• Removal of the en-route rebate scheme for regional airlines.
• Additional fuel excise to increase funding to CASA.
• Increased security screening at regional ports.

"The combined effect of these measures on Rex alone would equate to at least $6 million (US) per annum." Hine said. "Rex has already announced in its release of 1 June 2011 that the outcome of these measures could be the loss of air services to half a dozen marginal regional ports like Taree and Grafton. I foresee many regional operators without the financial strength and diversification of the Rex Group being forced out of business once these take effect after 1 July 2012. Those surviving will have to cut back on marginal routes in order to remain in business. This will unfortunately mean that some regional communities will suffer the loss of their essential air services."

Hine issued a call to Australia's Federal Government to consult with regional aviation with the hope that it will strongly reconsider its position on regional airservices "before it is too late. Given the extremely fragile state of regional aviation in Australia today, once an operator goes out of business it could become irreversible as the returns are too slim and uncertain to attract new entrants."

An article in The Economist indicates that under the government's plan, which has not yet been enacted into law, Australian companies will have to begin paying a $24 per tonne tax on their carbon emissions beginning next July. There is a corresponding cut in income taxes that will cost the Australian government more that it raises in carbon taxes in the first four years. The plan was crafted by Australia's first woman Prime Minister, Julia Gillard, as part of an agreement to bring the country's Green party into a coalition government, even though she had promised no new carbon tax during her campaign. With Greens and Independents, she claims to have enough votes to pass the plan when it is introduced in Parliament next year.

Regional Express (Rex) is Australia’s largest independent regional airline. The Rex Group comprises Regional Express, air freight and charter operator Pel-Air Aviation and Dubbo-based regional airline Air Link, as well as the pilot academy Australian Airline Pilot Academy.

FMI: www.rex.com.au, www.aph.gov.au