At a time when passenger head taxes at regional airports around Australia are under the spotlight, Whyalla City Council wants to raise the passenger tax at their local council operated airport by 250% in 2020.
Whyalla, population 22,000, sits on the upper western side of the Spencer Gulf in South Australia. To drive there from Adelaide, you need to go around the top of the Gulf via Port Augusta – a 400 kilometre trip four hour trip.
By air, scooting across the Gulf, the distance drops to 230 kilometres and about 50 minutes.
Qantas operates 16 return services a week from Adelaide using a Dash 8 300. Regional Express operates 28 return services a week from Adelaide using their Saab A340 aircraft.
According to Whyalla City Council some 77,622 passengers used Whyalla Airport in the last 12 months. That’s a shade under 1500 passengers a week or 213 passengers a day.
In 2014, Whyalla City Council upgraded the terminal and carpark (it costs $15 per day to park your car there now). The airport is staffed during flight times but outside flight times grounds to a halt.
Essentially, it is a sleepy country town airport that adequately fulfills its function.
But Whyalla City Council has ambitions and plans for their airport. They want to spend $9 million upgrading it. They want to spend $5 million upgrading the terminal, $3.5 million upgrading the runway and security screening, and half a million on “ancillary services.”
Local Council is determined that sleepy Whyalla Airport with its humble but sufficient turbo prop commuter services needs to “meet federal government measures to further strengthen Australia’s domestic and international aviation security with advanced screening technology.”
Local Council reckons it will make the airport and Whyalla generally more attractive to people, attracting more visitors and generally boosting the local economy.
Qantas and Regional Express reckon otherwise. To fund this development, the Whyalla City Council wants to raise their passenger head tax from $7.70 per passenger to $24 per passenger.
The issue is that these regional routes run on really slender margins. Regional Express says it makes about a $14 profit per passenger on short commuter runs like this. Qantas CEO, Alan Joyce, said this week in Canberra that charges like this can kill a market and kill a route. He cited the example of Whyalla as an unreasonable impost to fund an unnecessary development.
Whyalla Airport, despite the local council’s wet dreams, is never going to be a busy airport or attract the bigger planes that require sophisticated security screening. This airport development is an open invitation to both Qantas and Regional Express to cancel their Whyalla services.
Thuis brain fart by Whyalla City Council could potentially cost the town its airlinks and what revenue the council now makes from its airport operations.
It is a good example of why the airlines are crying foul about unreasonable passenger taxes and levies at many regional airports around Australia.