Regional councils are calling on the federal government to implement bond requirements for airlines that wish to operate at their airports. Albury City Council Mayor Kevin Mack expressed concern over the financial difficulties faced by regional airports due to the collapse of several airlines. "It is really disappointing that we continually have foregone income because of failures of the carriers," Cr. Mack stated. He suggested that the government should consider underwriting airlines that cannot demonstrate long-term viability.

Recently, Albury City Council reported it is owed $996,000 from Rex, Virgin Australia, Bonza, and Jetgo, all of which have gone into administration or liquidation in the past decade. Cr. Mack noted that these failures have resulted in higher fares for travelers, particularly with Qantas. "We can't tell the shareholders what or how they should arrive at their dividends, but seriously, [a] $600 return to Sydney for a 45-minute/hour flight? That's just ludicrous from a major port like Albury," he said.

Wagga Wagga City Council and Mildura Rural City Council also reported outstanding debts from defunct airlines. Mildura's CEO Andrew Elliot mentioned that Bonza and Rex owe significant amounts, although he did not specify the figures. "We are yet to receive an update on the recovery process. Reclaiming these funds remains a priority for our business and we will pursue them until final outcomes are made public," Elliot said. Wagga Wagga City Council stated it is owed $104,000 from Jetgo and $210,000 from Rex.

Rex's creditors recently voted to have US-based Air T acquire the airline after it entered voluntary administration last year. Unsecured creditors, including airports and suppliers, will not receive any compensation from the sale.

The councils are seeking reimbursement from the federal government through a $5 million fund announced last week. Tim Harcourt, chief economist at the University of Technology Sydney, emphasized the challenges faced by regional airlines, including smaller populations and high operational costs. "You have smaller populations, vast distances, pilot shortages and the same sort of fuel costs as capital cities, so there's always challenges," he said. Harcourt suggested that increased competition could lower prices and that government subsidies might help sustain regional airlines.

Cr. Mack, who also serves as acting chair of Regional Cities Australia, urged the federal government to establish a recurring funding stream and to reconsider security requirements for low-risk regional airports. Shadow Minister for Infrastructure, Transport and Regional Development Bridget McKenzie echoed these concerns, advocating for a Senate committee inquiry to address the financial impacts of airline failures on local councils. "We loved Bonza here [in Albury]," she remarked, noting the popularity of the airline's direct service to Queensland.

A Productivity Commission inquiry is set to investigate the aviation industry and the factors influencing regional airfares. Federal Transport Minister Catherine King clarified that the recently announced $5 million fund is specifically for debts owed by Rex, not for other airlines like Bonza, Virgin Australia, or Jetgo. "Any other debts that are owed by other airlines or other previous airlines really is a matter for either the administrators or the airlines that are currently operating those," she stated.