The prices of flights between Albany and Perth has been a strong local topic of discussion of late and now the State Government plan on looking into the reason we are paying a large amount for less than an hour flight.
Tourism Minister Paul Papalia has welcomed a parliamentary committee’s announcement that it will conduct an inquiry into the high cost of regional airfares in Western Australia.
Factors that the report will focus on High Costs from a Business, Social and tourism point of view and report on five specific issues. Tourism Minister Paul Papalia said "The McGowan Government made an election commitment to hold an inquiry into the high cost of regional airfares. “It’s an issue that has afflicted small businesses, tourism operators and local people in regional Western Australia for many years. A parliamentary inquiry has the power to shine a spotlight on this issue, get to the bottom of why these fares are so expensive and give airlines the opportunity to provide solutions.”
This is the statement from Rex Airlines:
Regional Express (Rex) is the leading regional carrier in Australia flying to over 50 ports in every state and has been acknowledged many times by industry experts as the best regional carrier in the world. We therefore speak with authority when we state that regional airfares are condemned to be more expensive than domestic and international airfares by the very nature of regional operations. We make no apologies when we charge more to fly from Sydney to Broken Hill, then if you were to fly Sydney to Singapore on Scoot, for example.
WA has seen Virgin Australia exit the regulated routes of Albany and Esperance after making heavy losses, even though these are monopoly routes and the airline was charging higher fares than what Rex is currently charging today.
Even with Rex's efficiencies associated with operating more than 50 aircraft on 75,000 flights per year, Rex's FY 16 operational profit before tax amounted on average to only $4 per passenger flight hour of over 400 km, while it spends $185 paying for the cost of flying the same passenger. A taxi driver makes much more profit carrying its passenger 10km in Sydney.
Be that as it may, Rex supports a full inquiry into regional airfares as it will shine a light on the real villains in this matter. Rex provides the following cost comparison between operations in WA and operations in the rest of Rex's traditional network in NSW, SA and VIC.
Rex also revealed that their total operating costs for Western Australia were 130% higher amount to an extra $35.18 per passenger flight hour than that in the other states. Reasons for this include higher airport and ground handling charges.