Flights grounded: Rex and council argue over higher passenger tax

From July 1, the tax on passengers leaving Orange Regional Airport will rise to $17.85, Rex has said it's "unacceptable" it was not informed of the change.

From July 1, the tax on passengers leaving Orange Regional Airport will rise to $17.85, Rex has said it's "unacceptable" it was not informed of the change.

A war of words has erupted between Regional Express (Rex) and Orange City Council over an increase to the airport passenger tax.

From July 1, airlines are charged $17.85 for passengers using the airport.

It’s a 25 cent increase over last year.

In a letter to council, Rex’s network strategy manager Warwick Lodge said it was “totally unacceptable” that the airline was not directly informed of the increase until June 16.

Mr Lodge said it was also “unacceptable” that Rex had not been told council’s operational plan was on exhibition and in previous years Rex had been informed and made submissions.

“Submissions are not received by council because the key airport stakeholders are being kept in the dark,” Mr Lodge said.

He said Rex had told council it required three months notice to implement a price change and a request for this notice was “flatly refused”.

However, council’s airport committee chairman Chris Gryllis confirmed the proposed change had been on public exhibition from May 9 and it was not possible to provide the amount of the price change four weeks in advance.

“Regional Express, like many businesses that have financial dealings with local councils over many years, would be aware of the timelines for making budget submissions,” Cr Gryllis said.

“They would also be aware that every year draft budgets have to be put out for community comment before they can be adopted.

“As soon as the final budget was adopted the new rate was sent promptly to Regional Express.”

Cr Gyrllis said the budget was adopted on June 13 and a letter sent June 16.

Mr Lodge said plans for a fifth return service to Orange, to start in September, would be shelved.

“Given the council’s high-handed and unreasonable approach, I will recommend to my board to allocate the additional Sydney Airport slot to another more deserving city,” he said.

“Furthermore, we will be applying a general fare increase to recover the under-collected head tax on tickets sold in advance.”

Cr Gryllis said the community was aware of the chequered relationship between council and Rex.

“Late last year, in the interests of building a better working relationship the council wrote to Regional Express, seeking an opportunity to meet face to face and work constructively,” Cr Gryllis said.

“The response from Regional Express left no doubt they did not want to explore that option.

“However, council is confident that Orange remains an important port for Rex and having a regional carrier ticks an important box for a regional city.”

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