South Australian Centre Alliance Senator Rex Patrick has described Wagga airport as being placed in a "lottery" for which regional cities are forced to upgrade security and face "unviable" costs.
REX airline passengers departing Wagga airport are currently not subject to security screening.
At a teleconference hearing of the Rural and Regional Affairs and Transport legislation committee on Thursday, Senator Patrick said requirements for extra security could see additional fees passed on to passengers and air routes shut due to lack of demand.
Senator Patrick questioned Regional Express deputy chairman John Sharp and network strategy general manager Warwick Lodge about potential changes to airport security requirements as part of a Senate inquiry into the aviation industry.
"One thing is for sure: there will be some air routes that will become unviable. You're not revealing what they are, but in essence it becomes a lottery for us senators and, indeed, for the public," Senator Patrick said.
Mr Sharp said that statement was "true".
"The cost of security screening at some airports will simply make the ticket price unviable for people. You've heard me say this before: we compete primarily against the motor car," Mr Sharp said.
"If it becomes too expensive to go by plane, people will drive. That obviously impacts on the number of passengers, and a reduced number of passengers means either less frequency of service or no service whatsoever."
Senator Patrick asked "how many routes around Australia will be jeopardised" if REX was required to upgrade security at the airline's expense.
Mr Lodge told the hearing that the airline's concern was that 'tier 2' airports like Wagga might lose its previous waiver to have both unscreened passengers and screened passengers.
"We've already got a number of airports that are tier 2 airports, such as Wagga Wagga, Albury and Mildura, where, under the current arrangements, we don't incur any screening, because they permit the segregation of unscreened and screened departures in parallel," Mr Lodge said.
"We submitted a submission to an options paper that was released last year by the Department of Home Affairs, and we outlined concerns in regard to the current practices with screened and unscreened passengers operating in parallel- if that was not to continue.
"That would probably be the biggest trigger point for REX in regard to the number of new airports where security screening would potentially be imposed."
Wagga's airport security has been the subject of debate for the past six years, with the Transport Workers Union claiming a lack of metal detectors and x-ray scanners for some flights was creating the risk of a terrorist attack.
REX has previously claimed that screening its outbound Wagga passengers would cost and additional $750,000 per year.
Mr Lodge told this week's senate hearing that REX had been informed by Home Affairs that the current arrangement could continue but it was "very hard to quantify the number of airports that would be impacted, because it's totally left the decision-making to the councils".
Earlier in the hearing, Mr Sharp said rival airline Qantas had "considerable economies of scale and advantages that REX doesn't have that overcome the increased costs it may incur as a result of security screening".
The Senate committee is due to present its interim report from an inquiry into Australia's aviation general industry in December.