Australia's Regional Express (Rex) has warned that "draconian government policies" are having a "catastrophic impact" on the country's regional carriers.
The airline, which reported that its profit before tax for the six months to 31 December fell by 33% year to A$12.5 million ($12.8 million), adds that many of Australia's regional carriers are "struggling for survival".
"We are seeing the catastrophic impact the various draconian government polices are having on regional aviation. Not only have policies like the carbon tax increased cost significantly, there has also been a significant drop in passenger numbers due to government policies exacerbating the effects of a fragile global economy," says the airline's executive chairman Lim Kim Hai.
"Regional aviation has been hit particularly hard. Besides the carbon tax and consistently high fuel prices, it was also the target of an onslaught of government fiscal and regulatory measures which resulted in the steep decline in the results we see today."
"Many regional carriers are now struggling for survival. If the government does not reverse tack very soon, we will see irreversible damage being inflicted by the destructive policies that they have adopted."
Lim adds that Rex will work with the Regional Airline Association of Australia to identify the policies that are needed to "rescue" regional aviation. It also wants to make this a political issue, calling on both the government and the opposition to state their position before the general elections later this year.
Rex adds that high fuel prices, government taxes and slowing passenger demand will dampen its full-year profits. The airline says, in its new projections, that profits are now expected to be 35-40% lower than the previous fiscal year.