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Keeping Our Regional Airlines in Flight

John Anderson, Deputy Prime Minister,  Minister for Transport and Regional Services and Leader of the Nationals

TRS9/Budget 10th May 2005

The Australian Government will spend $5.6 million in 2005-06 to subsidise the enroute air traffic control charges paid by more than 40 regional airlines and other operators, the Deputy Prime Minister and Minister for Transport and Regional Services, John Anderson, announced today.

"Australia's small airlines have a vital role in regional Australia. They connect town and country, businesses and customers, families and friends," Mr Anderson said.

"We have provided the industry with critical support since 2002 by rebating the enroute air traffic control charges that small airlines pay Airservices Australia. The scheme was put in place to support air services in regional Australia in the context of the grounding of Ansett and the 11 September 2001 terrorist attacks, and was due to end in June this year.

"Regional airline and aeromedical aircraft with a maximum take-off weight of 15 tonnes or less, such as Saab 340s, Metros and Piper Chieftains, will continue to be eligible for the scheme.

"Assistance will also be extended to services provided on sole operator routes by aircraft between 15 and 21 tonnes flown by operators wholly based in Western Australia.

"The extension recognises the exceptionally long distances involved in flying to Western Australian destinations, which require the use of larger aircraft. These destinations would be cut off - lost in the Australia's vast distances - without air services.

"As a result of the scheme, one operator is saving more than $28,000 a week. It's money that airlines can spend on better services and more affordable airfares," Mr Anderson said.

The Government will review the effect of Airservices Australia's charges on regional airlines to make sure they are not impeding the continued growth of the sector.

"The review team in the Department of Transport and Regional Services will consult with the industry, and the Government will consider its report in the lead up to the 2006-07 Budget," Mr Anderson said.

The Government will reduce its duties on aviation gasoline and aviation turbine fuel later in 2005-06, as a result of the removal of control tower subsidies. The duty on aviation gasoline will fall by 0.26 cents per litre; the duty on aviation turbine fuel will fall by 0.297 cents per litre. The duty rate on both fuels will then be equalised at 2.854 cents per litre.

"Our decision to reduce the tax on aviation fuel will be particularly welcomed by the general aviation sector, which has less ability to cover the high fuel costs faced by the industry," Mr Anderson said.

Mr Anderson said the Government had agreed to the implementation of a long term funding strategy for the Civil Aviation Safety Authority (CASA).

"Australia has the safest skies in the world, and we are going to keep them that way. CASA has conducted a rigorous review of the way it carries out its responsibilities. It will become a much more efficient and responsive organisation, and will focus its resources on protecting passengers first," Mr Anderson said.

"Under the strategy, CASA will be increasing its level of cost recovery, but the Government has made it clear that it must consult thoroughly with the industry before it makes any changes. There will be no new charges imposed on the industry before 1 January 2006."


Media contacts:
Paul Chamberlin Mr Anderson's office 02 6277 7680 / 0419 233 989