Maranoa councillor Cameron O’Neil threatened with litigation by Rex Airlines over comments during debate around Roma Airport deal

A western Queensland councillor has been threatened with legal action by a regional airline over comments he made during a debate over the local council’s proposed deal with the company.

A regional airline has threatened a western Queensland councillor with legal action and demanded an apology over comments he made during a meeting discussing a deal between itself and the council.

Roma-based councillor Cameron O’Neil was one of four elected officials to vote against a new four-year partnership between Rex Airlines and the Maranoa Regional Council to provide cheaper airfares to residents and business owners.

The deal, which narrowly passed 5-4 after being introduced by mayor Tyson Golder at the November 30 special meeting, will fix airport passenger fees for all flights along the regulated route to $29.91 per person from January 1 and will cap total revenue for the 2023 calendar year at $1.3m.

No landing fees will be charged as well.

Maranoa councillors Joh Hancock, Wendy Taylor and Cameron O'Neil were three of four elected officials to vote against a proposed agreement between the council and Rex Airlines.

In return, Rex Airlines will offer fares of $169 one-way for residents and $250 one-way for business owners, and allocate 20 per cent of its monthly average seat capacity to residents.

While Mr Golder and other councillors argued this would deliver economic and tourism boosts to the region, several of his colleagues were concerned it would guarantee the Roma Airport ran at a loss through to 2026.

Mr O’Neil said in the meeting his opposition “wasn’t about Rex” but rather the long-term sustainability of the airport and the council.

“It will be the rate base of the Maranoa that will ultimately pay for the shortfall of the operating cost of the airport for the next four years,” he said at the meeting.

“There will be a sugar hit here, people will be excited about cheaper airfares, I’m confident of that, but in the long run someone has to pay.

“Not to mention, a future council will have to do an upgrade to the airstrip and in my recollection it costs somewhere in the vicinity of $8m when we did that strip in 2018.”

Mr O’Neil went on to argue the state government should fund more affordable airfares for western Queensland, rather than the local government.

His arguments were shared by councillors Wendy Taylor, Geoff McMullan and Johanne Hancock, who all believed ratepayers would have to cover potential future losses of the airport.

Fallout from meeting comments

Just 13 days after the matter passed, Rex threatened to pull out of the deal after Mr O’Neil’s comments and concerns during the meeting were published by News Corp in its December 9 article.

This was followed by a media release from the MRC on December 23, where Mr Golder said council “regrets negative views reported in the media that gives the perception that the partnership with Rex results in a deficit for the Roma airport operations or that there is any form of subsidy to Rex”.

Executive Chairman of Regional Express (Rex) Airlines Mr Lim Kim Hai. PICTURE: JUSTIN BRIERTY

These comments were highlighted in an open letter from Rex Airlines executive chairman Lim Kim Hai to Mr O’Neil on Christmas Eve, arguing this “demonstrated that your comments … are both unfounded and malicious”.

“This is further evidence by the fact that you voted down Rex’s proposal, aimed at removing any possibility of financial burden on council, to take over the running of the Roma airport, no doubt because you knew how much the Roma Airport is subsidising council’s other deficits,” he wrote.

Mr Lim also accused Mr O’Neil of previously voting for an “extortionist” fee regime for the Roma Airport, citing passenger figures from November 2021 to October 2022 for all destinations on western Queensland regulated routes.

Those figures revealed the MRC collected $29.90 from every passenger, higher than the $20.02 collected by the Murweh Shire Council for Charleville Airport but much lower than the $46.06 taken by the Diamantina Shire Council for passengers through Birdsville.

“Rex can only assume that your public comments, crafted to give the impression that Rex is receiving a handout, were calculated to inflict reputational damage upon the airline,” Mr Lim wrote, before demanding an apology by Tuesday, January 3.

The Chronicle made attempts to reach Mr O’Neil for comment.

REX airlines plane being towed to the Brisbane Domestic Airport. Picture David Clark Photography

Previous clashes with councils

This is the not the first time Rex Airlines has threatened to pull out of agreements with local governments.

The company said it would cease flying to Grafton in New South Wales in June 2020, saying it was due to comments made by Clarence Valley councillors during a meeting.

Rex did continue with its Grafton route until July 2022 when it pulled out of the area along with five other regional centres, alleging misuse of market power by Qantas that was dismissed by the Australian Competition and Consumer Commission.

Grafton still has no commercial air service.

Mr Lim also sent a letter to every house in Dubbo in 2019, criticising the local council over its decision to raise airport fees.

Rex Airlines also got in a stoush with Tasmania’s King Island Council in 2018, again over landing and passenger fees.

Originally published as Maranoa councillor Cameron O’Neil threatened with litigation by Rex Airlines over comments during debate around Roma Airport deal