Regional Express (Rex) has pulled out of a $2.8 million deal with Wagga council to buy a troubled plane hangar and has threatened to pull its entire engineering operation out of Wagga.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
A bitter feud over council’s airport taxes has spurred the regional airline to shop around for a new city to service its planes after losing all faith in council.
The relationship breakdown means council will again be stuck with a white elephant in the form of a large aircraft hangar built using $2.5 million of ratepayer money.
Council had negotiated to offload its hangar to Rex back in January, after aircraft refurbishment company Douglas Aerospace went into voluntary administration.
The bungled deal contributed to the departure of former general manager Phil Pinyon and commercial director Peter Adams.
But a Rex spokeswoman has revealed it “does not make sense to proceed with the investment” when the airline is in the throes of moving its engineering facilities out of Wagga.
Rex had reportedly been asking council to fix the hangar for months to no avail and has queried the validity of the building certificate, given a “list of defects” that raise “serious work, health and safety issues”.
After 45 years of maintaining planes in Wagga, 70 jobs are on the chopping block after the airline declared it’s “contemplating withdrawing from the city”.
Rex “will issue an expression of interest from the councils in its Sydney and Melbourne networks”.
“Rex is considering moving its engineering facilities to another council area that is more appreciative and reasonable,” a spokeswoman said.
“Rex employs approximately 140 staff in Wagga and more than 50 per cent are engineering related.
“The Rex Group annual payroll in Wagga is some $10 million per annum and this would have a significant flow-on impact on the local Wagga economy.”
Wagga council, which on Sunday boasted of “a very strong and sound professional relationship”, would not be drawn on questions about Rex’s future in the city.
“Council has made all of the public comment we intend to make regarding the passenger head tax and Rex,” a spokesman said.
“Council values its partnership with Rex highly and recognises its continued commitment to the city and the wider Riverina.
“Negotiations with Rex are ongoing and council will not play out the negotiations in the media.”
Earlier this week Rex offered to assume the running of the airport, effectively calling council’s bluff on claims airport taxes had to be jacked up 35 per cent to cover losses.
Flights to Melbourne are on the chopping block if the tax hike is passed.
