Airport is no cash cow, says City
The City of Albany has revealed to a Parliamentary inquiry on regional airfares that it is running the Albany Airport at a loss.
The Albany leg of the inquiry, run by the State’s Economics and Industry Standing Committee, was held on Tuesday as the City presented a joint submission with the WA Regional Capitals Alliance.
City Mayor Dennis Wellington said after accounting for depreciation, the City was losing out.
“The fact is, at the end of the day we own the airport and we run it as a business unit; the airline runs theirs as a business unit,” he said.
“I just got a media release from Regional Express saying they’ve quadrupled their profits in the last year and we still run at a loss.”
City chief executive Andrew Sharpe said the City’s $1.1 million operating revenue surplus in 2016-17 was eradicated with $1.4 million of depreciation on the $30 million airport.
“It wouldn’t be good government if we weren’t providing for the replacement of that asset,” he said.
“So essentially we’re running at a loss of about $300,000 if you take into account depreciation.”
Mr Wellington indicated the City would be interested in Government support to cover its capital costs. “If you want to go back to council and make it a policy where we offered incentives to the airline if the capital cost was taken out of our consideration for upgrading the airport, we’d be all over it like a rash,” he said.
REX provided a written submission to the inquiry that included a comparison of airport charges across the country.
Albany’s average airport charges are listed as more than three times that of REX’s traditional network. “The cost of airport charges in WA are astronomically high, some 300-350 per cent higher than the rest of Australia,” the REX submission stated.
Albany Chamber of Commerce and Industry chief executive Russ Clark said deregulation was not viable in Albany.
“I’m not convinced that with the passenger numbers at the moment that deregulation would work,” he said.
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