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Supplementary Agenda
An Ordinary Meeting of the Bega Valley Shire Council will be held remotely via Zoom on
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Supplementary Agenda
An Ordinary Meeting of the Bega Valley Shire Council will be held remotely via Zoom on
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Council 29 April 2020
13.6 Merimbula Airport - Request for financial support for Regional Express during COVID-19 Pandemic.......................................................................................................................................................... 4
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Council |
29 April 2020 |
13.6 Merimbula Airport - Request for financial support for Regional Express during COVID-19 Pandemic............................................................................................................... 4
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Council 29 April 2020 |
Item 13.6 |
This report tables a request from Regional Airlines to Bega Valley Shire Council for financial support through a one-time support by the waiving of 50% of unit head tax of outstanding revenue totalling $46,565.00 to assist the airline in remaining afloat until the impacts of the COVID-19 Pandemic pass.
Director Assets and Operations
That Council provide financial support to Regional Express Holdings by a one-time waiver of 50% of the outstanding landing fees in the amount of $46,569.00.
Executive Summary
This report tables a request from Regional Airlines to Bega Valley Shire Council for financial support through a one-time support by the waiving of 50% of unit head tax of outstanding revenue totalling $46,565.00 to assist the airline in remaining afloat until the impacts of the COVID-19 Pandemic pass.
Background
Council previously considered a request from Regional Express Holdings (REX) on the 8th April 2020 to provide support through reduction of passenger landing fees in response to the impacts of the COVID-19 Pandemic and resolved on the following:
That Council provide support to Regional Express through the reduction of passenger landing fees by 70% for Merimbula Airport during the COVID -19 pandemic for a period of six months and undertake a further review at the end of the six-month period.
The COVID -19 Pandemic continues to have a major impact on the Australian economy and the domestic airline industry with extensive travel restrictions in place across the country resulting in a substantial fall in passenger numbers across the industry.
REX have written to Council to consider providing further financial support to assist in keeping the company afloat during this period and a copy of this letter is appended to the report.
REX are requesting that Council provide a one-time support in the form of a credit note of $46,596.00. This amount is 50% of the outstanding passenger landing fees owed to Council for the months of February and May 2020.
Options
The options available to Council are:
1. That Council provide financial support to Regional Express Holdings by a one-time waiver of 50% of the outstanding land fees in the amount of $46,569.00.
2. Decline the request for support from Regional Express Holdings and seek payment of the outstanding landing fees in accordance with BVSC existing policies
3. Other options, as raised and resolved by Councillors.
Financial and resource considerations
The waiving of 50% of landing fee income of $46,596 will have an impact om the budgeting for the management and operation of the Merimbula Airport for the 2019/20 year.
Council has several fixed costs including the Operation and Management Contract for the Airport which is offset by the landing fee income which have already been incurred.
Combined with the reduction of the waiving passenger landing fees by 70% for the next 6 months will also impact the management and operation of the Merimbula Airport for the 2019/20 and 2020/21 years with income predications for the next 6 to 9 months being negligible whilst the COVID-19 Pandemic travel restrictions remain in place.
However, the risk of losing the RPT service to Merimbula Airport could potentially have far more long term financial implications to the both Merimbula Airport and the wider economy in the Bega Valley Shire.
Legal /Policy
Under the Local Government Act 1993 the Council has the power to waive or reduce fees including Airport fees and charges.
Impacts on Strategic/Operational/Asset Management Plan/Risk
Strategic Alignment
The Airport is a critical element of Council’s transport strategic direction and its management and the provision of RPT services into the future will be critical to ensure the best outcomes for the community.
Economic
The economy of the Bega Valley has been traditionally dominated by primary industry including agriculture, forestry and fishing. While these industries are still significant, several other key sectors have developed including manufacturing, tourism and remote area employment.
There is growing momentum for projects linking air freight from the area. The Airport, as part of the regional/national transport network, provides access to business markets and thereby significant support to the local economy and at the same time airport operations generate a direct economic benefit.
Risk
Losing the RPT services to the Merimbula Airport could and would have far ranging impacts across the shire from an overall an overall integrated transport network, which links the Bega Valley with capital cities.
Social / Cultural
Community benefit is arguably the main reason why Council owns and operates an airport. Airport operations are a vital component of an overall integrated transport network, which links the Bega Valley with capital cities.
The Airport provides essential links for professional, legal, specialist and medical services as well as passengers for tourism, employment and business.
1⇩. Attachment - 2020.04.23 Rex Letter to Bega Valley Shire Council
