Wagga airport, one of many regional air operations that have run at a financial loss, would benefit from an overhaul of federal aviation funding, according to Wagga council.
A Productivity Commission report, released on Tuesday, called for independent analysis of the need for funding based on each "functional economic region" rather than on council areas.
Wagga City Council business manager Darryl Woods said the commission's suggested reforms to government funding would improve the planning and cost estimate process for new projects.
"The provision of a framework so that robust business cases can be developed would assist at regional airports, with an equitable allocation of funding based on need, demand and services provided," Mr Woods said.
The report also found that Wagga airport was one of the 33 per cent of regional airports that "did not generate enough revenue to cover their total costs" in 2017.
The regional airports that were able to run at a profit tended to cater to tourism or had a "large share of passengers that work in the resources sector" or the mining industry.
"Regional airports - the majority of which are owned and operated by local councils - provide important services for communities, but are prone to poor decision making and governance," the report stated.
The commission also called for changes to regional NSW's allocation of runway scheduling 'slots' at Sydney Airport.
Mr Woods said the suggestions would have " negligible", if any, effect on Wagga's commercial services but could make it easier to clear backlogs of flights following bad weather delays.
Wagga Aero Club president Geoff Bruest was unable to comment on the final report at the time of publication but he had made a public submission in response to the draft report on behalf of the Regional Airport Users Action Group.
"We are very pleased the plight of regional and local airports and their users has been highlighted as a significant issue," Mr Bruest stated.
Mr Bruest stated that the report contained "little about the burden of increasing security requirements at regional airports".
"The next major hurdle for regional airports is...mandated increased security screening requirements and their associated costs," he stated.