GRANT District Council is yet to make a decision regarding whether it will commit to a five-year “community fare” deal with a regional airline giant.
This follows elected members thrashing out the issue behind closed doors in the chamber on Monday night.
Media were barred from the discussion given the commercial sensitivity relating to the operations of the airline.
Following years of turbulence between the community, council and the carrier, the airline extended an olive branch during the senate inquiry into regional air services in Mount Gambier last month.
The airline proposed a $129 one-way community fare on potentially 25pc of tickets if council reduced its passenger tax of $9.50 (plus GST) by $2 on every ticket.
But this could mean council would see its revenue for the airport plunge significantly.
The community fare tickets will only be available if booked 30 days before travel or the day before on “unsold seats”.
While Mr Sage could not reveal the finer details of the robust discussion in the chamber, he said council had now directed staff to undertake additional financial modelling before a decision could be made.
“Council members looked at the information staff have prepared and had a few questions. We are now going back to revisit some of the work and look at the options available,” the mayor said.
“We will then go back to Rex and negotiate.”
Mr Sage said council was not in a position to make a decision given it needed to consider the future direction of the airport and its ongoing viability.
He revealed the proposal would see a $160,000-plus cut to the airport’s revenue.
“That’s a fairly big hit first up and we also need to consider what our wage bill will be and factor those into the long-term financial planning,” he said.
While the numbers of passenger could rise, he said this was not guaranteed.
“We do not know what that figure could be,” the civic leader said.
He said even a 5pc or 10pc increase in passenger growth would only deliver a small growth in revenue.
“We are not really worried about it, but we have to do our homework before we make a decision,” the mayor said.
Regarding Rex’s proposal, he said the airline flagged the community fare could be potentially available on 25pc of seats.
But he warned travellers would need to book well in advance or the day before to qualify for the community fare seats.
“Council is keen to work with Rex to get a better outcome for everybody, but we still have to maintain the facilities we have,” Mr Sage said.
“Council must undertake due diligence. We need to look at what has been put on the table by Rex and our staff and find a happy medium.
“Staff will consider whether we can cut costs and what we can live with and cost predictions moving forward given the upgrade.”
He described the looming upgrade as a major step forward for the airport given the new look terminal and runway extension.
“We have still got the ongoing maintenance,” he said.
Mr Sage foreshadowed a decision regarding the community fare could be made at is next council meeting in mid-August.
The multi-million dollar upgrade was likely to get under way later this year following the finalisation of plans and tenders.
At the council meeting, Cr Alan Hill moved the discussion be taken out of confidence and held in the public arena.
But this was not supported by his fellow councillors given the documents included a letter from Rex.
The Border Watch was the only media present at the meeting.
