The regional airline has offered to run the Forest Hill airport, calling council’s bluff on claims the facility cannot break even without charging passengers more. 

Flights from Melbourne to Wagga will be the first to go.

Rex has revealed its Wagga services are “barely covering” costs and cannot absorb a proposed 35 per cent increase to its passenger head tax. 

It comes after council general manager Alan Eldridge said the city “cannot keep borrowing to pay for annual losses at Wagga airport – which has been the case for the past five years”. 

A Rex spokeswoman said Wagga council “claims to have $1 million in depreciation costs, which Rex finds unbelievable”.

Former councillor Julian McLaren – who retired before September’s election – has backed Rex’s claims, claiming the airport does turn a profit and accusing council of “creative accountancy” to “spin” a different story.

Mr McLaren said council’s intention to raise passenger head tax revenue from $2.21 million a year to $2.97 million a year was “predatory pricing”.

Mr McLaren’s comments reflect Regional Express boss Neville Howell’s bold claim the airport was being treated as a “convenient cash cow to cover up for excesses and abuses” in other departments.

“This is predatory pricing from Wagga City Council using their monopoly status to corner Rex, knowing their training and engineering facilities are both in Wagga,” Mr McLaren said.

“The airport was making a profit when I was councillor, so I’m assuming they've made changes to their accounting to show a loss.

“Wagga council needs to understand the state government is giving them $4 million to upgrade the airport, so it’s perhaps disingenuous to depreciate an asset they didn't pay for.”

Council has claimed the airport has lost $405,000 in 2014/15; $563,000 in 2013/14; $259,000 in 2012/13; and $186,000 in 2011/12.

The Daily Advertiser understands depreciation of assets accounted for $812,000 in 2014/15; $808,000 in 2013/14; $400,000 in 2012/13; and $390,000 in 2011/12. 

The state government has pledged $4 million to upgrade the tarmac and another $2 million to upgrade the terminal, bringing the much-maligned baggage claim undercover.