Local taxes rankle Aussie’s Rex

 - September 27, 2007, 6:44 AM

Australia’s Regional Express (Rex) will cease operating into the city of Parkes in response to the local government’s decision to hike passenger taxes by 15 percent. Within days of the September 4 announcement, Parkes Shire Council offered further talks  about the taxes, but Rex’s board has declined to reconsider its decision, arguing that it has already had two rounds of negotiations with the local politicians.

According to Rex, it has more than doubled airline passenger traffic into Parkes–
located 160 miles west of Sydney–from 13,400 in the 2000-01 financial year to 31,700 at the end of the 2006-07 period. Over the same time frame the value of passenger taxes the local council collects has grown from A$100,000 to A$190,000 ($82,000 to $157,000).

Rex took over services into Parkes when the Ansett/Hazleton airline alliance collapsed. Since then it has boosted annual capacity to 62,000 by replacing 19-seat Metro 23s with 34-seat Saab 340s.

At the same time, Rex has also announced that it will withdraw services from Sydney to West Wyalong, although this time the move is not due to conflict with local authorities. The twice-weekly service was established primarily to carry construction workers to the new Lake Cowal gold mine, but traffic levels have dropped off steeply since the facility’s completion.

Separately, Rex is set to launch new Saab 340 services connecting Lismore and Brisbane beginning October 13. Starting with one weekly flight, the expansion is the first step in a strategy to connect the airline’s network in New South Wales with cities in the neighboring state of Queensland. It already flies from Sydney to Lismore and recently started another new service between Brisbane and Maryborough.