Australia's Rex in dispute with Sydney Airport over fees

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Australia's largest independent regional carrier, Regional Express (Rex), is embroiled in a bitter dispute with Sydney Airport over planned increases in fees.

Rex has described Sydney Airport's plans as "Machiavellian" and each side has accused the other of politicising the issue.

Sydney Airport says it plans to increase aeronautical fees for domestic regional carriers by 22-23 Australian cents (19 cents US) per passenger subject, to approval from he Australian Competition and Consumer Commission.

"The full increase will not apply to QantasLink, Virgin Blue or Jetstar as these airlines have negotiated commercial agreements on a normal business basis with Sydney Airport," it says.

Sydney Airport adds this will be the first such increase since 2001 and is necessary because the airport needs to recoup some of the monies it has invested in airport infrastructure.

Rex says the increase in aeronautical charges will cost it an additional $130,000 per annum and that Sydney Airport is also trying to increase Rex's parking fees to A$3.7 million per annum from A$700,000.

The airline says it has benefited in no way from the infrastructure investment because it mostly relates to changes to the airport runway, to prepare for the introduction of the Airbus A380.

Sydney Airport has also spent money on improved passenger security screening, but this is for international passengers whereas Rex's domestic passengers require no such screening, says Rex.

Both sides have accused the other of politicising the issue by lobbying for support from local government and politicians in the national government.

Sydney Airport says: "Rex has written to regional councils and parliamentarians attempting to enlist their support in opposing these first modest increases since 2001."

Rex says "it was Sydney Airport who first wrote to stakeholders in regional communities on 25 June, prior to discussions being finalized."

"Rex had no choice but to respond to Sydney Airport's public claims."

Both sides have political allies. Macquarie Airports owns Sydney Airport and the Macquarie Group has managers who are former Liberal Party politicians.

Rex, meanwhile, often drums up support from governments in regional Australia and its deputy chairman is John Sharp, a former National Party politician and Australia's former transport and regional development minister.