Subsidy for Regional Air Services Reinstated

[Rotor Work]

From the Examiner

Subsidy for regional air services reinstated after pressure from carriers | The Examiner (http://www.examiner.com.au/story/2560877/subsidy-for-regional-air-services-reinstated-after-pressure-from-carriers/?cs=12)
Subsidy for regional air services reinstated after pressure from carriers

By Matt O'Sullivan

Sept. 15, 2014, 5 p.m.
The Abbott government has finally reinstated a subsidy scheme for airlines flying on minor regional routes following pressure from carriers such as Regional Express.
The Gillard government removed the enroute rebate scheme in 2012 when it established the carbon tax. Regional Express, the country's largest independent regional airline, was one of the most vocal critics of the decision, and repeatedly demanded the Abbott government reinstate the subsidy.
The new scheme will subsidise navigation charges on low-volume routes to regional areas.
Federal Transport Minister Warren Truss said part of the assistance would go towards supporting new routes to regional communities that did not have air-passenger services.
"It can take years for new regional routes to establish sufficient support to become viable, which is why we are providing this additional support for up to three years," he said.
The government will provide $1 million each year over the next four to assist scheduled passenger services. The funding is on top of $1 million allocated each year to aero-medical services such as the Royal Flying Doctor Service.
Under the scheme, airlines can apply for assistance for flights on routes carrying up to 15,000 passengers each year using aircraft with a maximum take-off weight of 15 tonnes.
Early this year, Regional Express demanded the Abbott government live up to its promise to reinstate the enroute rebate scheme for flights on new or low-volume routes to regional Australia.After large losses by Qantas and Virgin Australia, Rex warned last month that regional aviation was in worse shape by highlighting the collapse of two small airlines within nine months. Darwin-based Vincent Aviation was the latest to be placed in receivership in May.
Comment is being sought from Rex.

[porch monkey]

And no doubt just in time for the regional airports to be privatised......perfect for the money grubbing bottom dwellers.

[tail wheel]

Most of the regional airports were "privatised" under the Airports Local Ownership Plan (ALOP) in the early 1990s. Many Councils were faced with taking over ownership and maintenance of their airport or seeing it closed.

[porch monkey]

Council ownership isn't privatised. I was referring to another article in a post in another thread about councils now looking to sell off their airports too. Of course, it could work really well. Just like it has at the major airports.:mad:

[LeadSled]

Folks,
Anybody who has read an ALOP contract between the councils and the Commonwealth will know that a condition of the contract is that an airport remains.

However, the "department" long ago declared that this condition was "out of date" (wouldn't it be great if we could declare contract conditions "out of date") and we have already lost some or all of a number of airports. It was John Anderson who was conned (and I do mean conned) into signing a policy document on the subject -- wishing (or is that washing) away said inconvenient contract provisions.

This is what the "department" calls "light handed regulation", ie: non-enforcement of inconvenient requirements of a contract.

We all know about the "influence" of property developers, and where short term profits bury long term needs.

I am looking forward to equal treatment of all council infrastructure, (it has been mooted in some places) where there will be user charges for all council property, including local road, footpaths etc.

Seriously, some councils have been smart enough to realise the local airport is an asset, not a liability, but these enlightened councils are few and far between.

Tootle pip!!

[Fieldmouse]

This money is going to go to third level operators like REX, operating small RPT into small markets, and only refunds part of the en-route charges. Airports have SFA to do with it. This is due Rex threatening to pull out of Grafton/Taree and the like. Taxpayer subsidy to <15 tonne airliners. Pure and simple.

[Sarcs]

From Australian Flying: Rebates Return but Rex Not Impressed (http://www.australianflying.com.au/news/rebates-return-but-rex-not-impressed)

Regional airline Rex has criticised the federal government's new rebate scheme as "token" and says it will do nothing to stem the loss of regional services.

Minister Warren Truss announced a return to subsidies for regional air routes yesterday, pledging $1 million per year over four years to help airlines cover Airservices Australia's en route charges. Routes eligible for the rebate must not carry more than 15,000 passenger every year.
In a statement released today, Rex Chief Operating Officer Neville Howell expressed the airline's disappointment in the new scheme.

“The amount allocated by the Federal Government to the new Enroute Charges Payment Scheme represents only 15% of the assistance given under the previous scheme. Furthermore, the low threshold of 15,000 passengers per annum means that most of Australia's regional routes are not eligible for the rebate.

“It is disappointing that the government is doing so little to help regional aviation when 16 regional airlines have collapsed in the last 12 years. Given the current aviation crisis in this country, more will collapse, and the token amounts will not stem the permanent loss of regional services to many parts of regional Australia.”

Rex currently operates 1300 weekly flights to 36 regional airports throughout eastern Australia. The airline made a profit before tax of $10.7 million for the 2013-14 financial year, a drop of 45% from the previous year. Also covered by AA: Rex disappointed with “token” $1mln enroute scheme (http://australianaviation.com.au/2014/09/rex-disappointed-with-token-1mln-enroute-scheme/)

This statement at the end - A spokesperson for the minister told Fairfax Media on Monday it was not possible to reinstate the full value of the previous scheme due to the state of the budget that the incoming government inherited.

Strange dichotomy when you consider that the previous government facilitated an $89 million bucket of money for CASA from an increase in fuel excise, surely there is still some of that bucket left?? :rolleyes:

[sunnySA]

Under the scheme, airlines can apply for assistance for flights on routes carrying up to 15,000 passengers each year using aircraft with a maximum take-off weight of 15 tonnes.
Good for Saab 340 operators, not so good for Dash 8 or ATR operators.