COMMONS, Mr Justin, Chief Executive Officer, Whyalla City Council [by video link] KING, Ms Sue, General Manager, Corporate Services, Whyalla City Council [by video link] LANE, Mr Andrew, Chief Executive Officer, Broome International Airport [by video link] [14:42] CHAIR: Welcome. I understand that information on parliamentary privilege and protection of witnesses giving evidence to Senate committees has been provided to you. Is that correct? Mr Commons : Yes, that's correct. CHAIR: I now invite you to make an opening statement. Ms King : Thank you, Chair and senators, for the opportunity for us to appear before you today. I'm appearing on behalf of the Whyalla City Council and as a lifelong resident of Whyalla, a regional city that is heavily reliant on a single airline service to connect our community with Adelaide and the rest of Australia. While aviation services to regional communities are often discussed in terms of routes, schedules and passenger numbers, the reality for people living in Whyalla and our region is that the air services directly affect our ability to access business opportunities, government services, health care, education, investment and tourism. Whyalla is currently serviced by only one airline. This lack of competition significantly limits choice, flexibility and resilience within the market. If services are reduced, delayed or cancelled, there are few practical alternatives available to residents and businesses. One example of the challenges we face is the flight schedule between Whyalla and Adelaide. The afternoon departure from Adelaide is typically around 4 pm, which restricts the ability of travellers to conduct a full day's business in the capital city before returning home. In many cases, this results in an additional overnight stay, increasing accommodation, meal and travel costs for individuals, businesses and government organisations. More recently, our Saturday services have been removed due to passenger number considerations. While this decision may make commercial sense for the airline from an airline's perspective, it further reduces connectivity for regional residents. It limits weekend travel options, reduces flexibility for visitors and tourists to visit Whyalla, and can make regional communities feel increasingly isolated. For regional centres such as Whyalla, aviation is not simply a transport option; it's critical infrastructure. Reliable and affordable air services enable economic growth, workforce attraction, specialist service delivery and community wellbeing. When services are reduced, the impact is felt across the entire community. We encourage the committee to consider the broad economic and social importance of regional aviation and the unique challenges faced by a community that relies on a single carrier and limited flight schedules. Mr Commons : The key message in the City of Whyalla's submission is simple: regional aviation is essential infrastructure, yet the current funding model that is in place puts an unfair burden on small regional communities like Whyalla. Whyalla services not only our city but the broader Upper Spencer Gulf cities of Port Augusta and Port Pirie, as well as the Eyre Peninsula region, which has 11 councils across the western part of our state. Our airport currently operates in a very challenging environment. We have about 48,000 passengers annually; only one airline, as Sue mentioned; and significant operating costs that cannot be spread across a large passenger base. As a result, our airport currently operates at an annual operating deficit of about $1.5 million per annum. This equates to about 60 per cent of the airport's gross expenditure and approximately six per cent of council's total rate revenue base. The major contributor to this challenge is the cost of aviation security. Our security screening costs are approximately $1.3 million per year. This creates a cost to departing passengers of approximately $54 per person. This problem is compounded in the fact that Whyalla is about four hours drive from Adelaide and, when airfares rise, many residents simply choose to drive as they just cannot afford to pay for air tickets, particularly given our socioeconomic index, SEIFA, which is particularly low at 886. I really encourage the committee to be mindful also that the South Australian aviation context is disproportionately troubled compared to other states, given the lack of major regional capital cities outside of Adelaide. We've got Mount Gambier in the south with 28,000 and Whyalla in the north with 22,000 people. Consequently, many of the workforce that come in and out of our major population base of Adelaide flying in and out of South Australia for employment purposes puts a significant impact on our airport. Our submission quite clearly talks to the broader consequences, which I won't repeat at this point in time. Our primary recommendation is the introduction of a uniform national aviation security levy rather than regional passengers bearing a disproportionate share of security-screening costs. We believe that these should be more equitably distributed across the aviation network nationally. We believe that aviation security is a national responsibility and should be funded accordingly. Industry modelling in our submission suggests that a national levy of approximately $1 per ticket for every passenger that uses the network right across Australia is more equitable than in some cases such as ours, where we've got a $50-plus cost being added to the ticket price. We also continue to advocate for capital funding to support regional airports, cover compliance costs et cetera. In closing, our submission highlights that communities such as Whyalla are currently paying twice for access to air travel: (1) through higher airfares and (2) through higher local council rates that are needed to subsidise airport operations. We have been waiting for a long time, through multiple aviation white papers and inquiries such as this, for meaningful reform. As I said before, we particularly advocate for a national security funding model to ensure that all Australians can have access to affordable, reliable and sustainable air services into the future. CHAIR: Mr Lane, do you have an opening statement? Mr Lane : Yes, I do. Broome International Airport is the principal aviation gateway to the Kimberley and one of Australia's very few privately owned regional airports. Broome sits more than 2,000 kilometres from Perth and services one of the most geographically dispersed regions in Australia. In this environment, aviation is not a convenience; it is essential infrastructure. For many of the Kimberley communities, there is no practical alternative to air travel. Aviation enables access to health services, education, employment, government services, tourism, emergency response and economic participation. It also supports nationally significant industries, including tourism, resources and oil and gas operations. While much of the public discussion focuses on airfares, I would suggest that affordability and reliability are symptoms of a broader structural challenge facing the regional aviation industry. Regional airports operate under fundamentally different conditions to metropolitan airports. We are required to provide the same safety, scrutiny and compliance outcomes, but we do so with a much smaller and highly seasonal passenger base. Those fixed costs do not reduce simply because we have fewer people travel through the airport. At the same time, construction, maintenance and workforce costs are significantly higher in remote Australia. Importantly, high regional airfares are not primarily driven by airport charges. They are influenced by thin markets, long distances demand volatility and the commercial realities of operating regional routes. Airport charges represent only a small component of total airline operating costs, yet they fund the critical infrastructure that allows these services to operate safely and reliably on a daily basis. From BIA's perspective, one of the most significant policy issues is the disconnect between the national benefit delivered by regional aviation infrastructure and the way the infrastructure is funded. Regional airports are expected to invest in safety, security and capacity that delivers public benefit, yet much of that investment must be recovered from the relatively small passenger base. This challenge is even more acute for privately owned regional airports, where access to government funding programs can often be limited or inconsistent. If Australia wants reliable and affordable aviation outcomes in remote regions, then aviation should be recognised as essential national infrastructure. That means being ownership neutral, with infrastructure funding, proportionate regulatory settings, a stronger integration between aviation, tourism and regional development policy and the greater recognition of the unique operating realities of regional and remote Australia. I welcome the committee's questions. CHAIR: I'll throw to Senator Lambie to start. Senator LAMBIE: I have some questions for Broome airport. Your submission states: Fixed and mandated costs are often higher than comparable costs incurred at metropolitan airports … Can you outline which costs you believe are higher? Mr Lane : The general building costs. The cost of getting materials to such a remote region and the cost of labour within those regions just makes the actual cost of delivering on those requirements significantly higher than in metropolitan areas. Senator LAMBIE: We thought that might have been the case, but I thought I'd ask just in case we were missing something. You don't have to be too specific—it might be commercial—but what's the general margin that the Broome International Airport is operating on at the moment? Mr Lane : Are you talking about the passenger fee levy? Obviously, it's a very different margin across the board, but they are thin margins. They are margins that are highly seasonal. During the peak season it can make money, and in the off season we lose money. It flattens out over time, because they're done on a passenger movement basis. Senator LAMBIE: How does the Broome airport work? Does the local government own it? Mr Lane : No, it's privately owned. It's one of the few privately owned regional airports in Australia. It's from a freehold land base, and we are owner-operator. Senator LAMBIE: Has the airport had to defer any upgrades or improvements owing to the costs at this point in time? Mr Lane : Absolutely. We prioritise those on a daily basis, with safety being the number one priority. We don't compromise on our safety side of things, but we certainly do on things like upgrades to our departures hall and our customer experience. However, we do work with the airlines for their contribution to that as well. Senator LAMBIE: Do they contribute much to that, usually? Mr Lane : There are robust discussions about where airlines want to contribute, but we're working with them on that through what we call our ASAs—our air services agreements—which most airports with airlines flying into them have. Senator LAMBIE: Are those agreements done yearly, or is that just when you need an upgrade so you bring them to the table and say, 'You guys have got to chuck in'? Mr Lane : They're generally a 10-year type of contract that provides some sort of guidance for the future and allows for capital expenditures that are upgrades to the airport. It generally feeds back into passenger movement charges. Senator LAMBIE: Whereabouts are you in that 10-year cycle at the moment? Mr Lane : We're just signing the new one now for another 10 years. Senator LAMBIE: Has that worked well for the Broome airport. Did the other airlines put in enough? Mr Lane : I will say that the negotiations with the airlines were significantly better than they were seven years ago. I think we're dealing with a different airline, but there's still room for improvement. Senator LAMBIE: You're very politically correct. Good on you. Thank you for that. It's nice to know they've upped their ante slightly. I have a few questions for Whyalla—good afternoon. From the summary figures provided by council, it seems the airport is now running at more than a $1.5 million loss annually. What was the situation pre-COVID? If Rex were still flying into Whyalla, what impact would you expect that to have on the financials? Mr Commons : The financial sustainability of the airport has deteriorated since pre-COVID. Pre-COVID, we had about 80,000 flights per annum. Now we're down to about 48,000 passengers per annum. That's in and out. The only real income that council can generate is passenger levies. When you've got a reduction in passenger numbers, passenger revenue overall is going to go down accordingly. The second part was what would be different if Rex were still here—the only difference would be that there would be more competition on the route, which would potentially result in lower ticket prices. All things being equal, lower ticket prices should generate increased passenger numbers. We've got the awkward situation that we're about four hours' drive from Adelaide. Our current ticket prices can, depending on which flight you're on, be in excess of $500 one way. Many of our families who have significant socioeconomic challenges simply cannot afford flights. In particular, if you've got a family, it's going to be much cheaper to jump in the car with a family of two, three or four, even though it's an uncomfortable four hours drive one way and then four hours back. So the main difference, in terms of Rex being here or not here, would probably be around competition and the ticket prices that we're currently paying. Senator LAMBIE: Has the mine there also been a problem because they've reduced the numbers? I don't know how much fly-in fly-out there is; I know a lot of it was localised. Have you lost some from that as well? Mr Commons : Yes, definitely. We've got a bit of a double-edged situation in regional South Australia. Everyone knows that there is a shortage of the workers required. The forward projection for regional South Australia is a reduction in population, yet many of the jobs, industries and economic wealth that is generated within the state come from the region. So we're seeing more and more fly-in fly-out or drive-in drive-out people coming into the region to service the regions from metropolitan Adelaide. That then plays a really significant role in terms of Whyalla. For anyone who wants to access the region other than via Port Lincoln further to the south, the airport becomes a significant entry and exit point to the broader region. I didn't mention before that the airlines obviously support our major industry within our city and region, which is steelmaking as well as mining and renewable energy projects. We've got national sovereign significant industries here, particularly steelmaking. Because of the current state of the steelworks, with the blast furnace and the current sale process, I suspect that passenger movements are down at present. However, I am extremely confident—I'd probably bet my next annual salary increase—that, once the new owner of the steelworks is announced and they outline their multibillion-dollar investment in the region, the number of people coming in and out of Whyalla through the airport will significantly increase going forward. We're just in the quiet before the storm at this point in time. Senator LAMBIE: You guys have obviously experienced firsthand the impact of the changes to security requirements. Your submission mentions Rex dropping Whyalla as a destination because of these changes. In that context, it's been put to the committee that the airports have all the power in the negotiations with the airlines. Would you like to comment on that statement? Mr Commons : That is not a correct statement. It's actually offensive, to be quite blunt, for any airline to suggest that airports, particularly in regional locations, are able to influence the passenger levies without consultation. I did note Rex's submission, where they made reference to councils generating significant cash surpluses from passenger fees to go towards other council services. Nothing could be further from the truth, Senator. We are price takers, largely, when it comes to the passenger levies in the context that we get a lot of pushback from the airlines, noting the price elasticity of demand. Rex made the point before leaving here that they didn't believe they could assume an increase in ticket price to cover the cost of security screening, because that would have a direct impact on their demand. However, the biggest loser throughout this whole process, noting that someone has to pick up the tab, is the end user, being the ticket purchaser. We currently have users of our airport paying approximately $54 per ticket to depart Whyalla Airport. That's a direct increase in cost on the ticket price, which then obviously has an impact on demand. As per my opening statement, our council and our community ends up paying twice, both in terms of higher ticket prices for the use of the airline and our ratepayers having to pick up a higher operating deficit for running the airport, given that it's a council owned and operated airport, and we have to fund the ongoing operational costs. Senator LAMBIE: Would you care to comment on whether Rex exiting Whyalla has had any impact on the nature of interactions or relationship with Qantas? Mr Commons : No. Our interactions, as a council and as an airport provider, with Qantas have been consistent both pre and post Rex's departure. We intend to maintain a good working relationship with Rex. From my perspective, Rex took issue with the fact that we wanted to share the cost of security screening equally across all passengers that use our airport. If you come back to the principle of what the national security screening was aimed at achieving, it was about improving safety for passengers to use the airlines. It would make no sense whatsoever for us to screen half the passengers coming through our airport and not screen the other half given that both those aircraft go to the Adelaide international airport. So from a security point of view, we took a very straight-bat approach where we believe that every passenger should be screened, every bag should be screened and that the cost of that should be passed on proportionally to both airlines. However, Rex took issue with it. They didn't believe they needed to contribute given that their aircraft size was not meeting the threshold set by the Department of Home Affairs. Senator LAMBIE: Oh, I see. That's right. So they're just being a bit naughty—Rex. Anyway, does Home Affairs seek any or regular information from the council regarding the cost of your security screenings? Do they want to come in and save you? Ms King : We have regular contact with the Department of Home Affairs in terms of the quality and the compliance of our security screening. In terms of them coming in to save us, no, we certainly haven't entered into any of those discussions, nor has the Department of Home Affairs spoken to that point. Mr Commons : If I may add to that response, the Department of Home Affairs sets the policy position in terms of security screening. The department of regional transport infrastructure et cetera, so Minister King, has the budget for airports. There is a disconnect between the policy intent and the funding available. Of our own volition or otherwise, we were led to believe that there would be ongoing funding for security screening for regional airports after the Department of Home Affairs introduced that policy position. We did receive some funding in the early days, particularly in terms of the capital investment to get the security screening in, that we thought was going to be ongoing funding but the narrative changed. That funding was provided during the COVID period to support aviation during the COVID period. Then post-COVID, that ongoing funding to cover the cost or subsidise the security screening ceased completely, so we're not receiving any government funding or support for the ongoing cost of security screening at our airport. Senator LAMBIE: I just want to know a little bit more about Rex. If the government was paying $54, or covering these costs, do you think Rex would have stayed around? Mr Commons : Absolutely. The only reason that they put to our council was the fact that we were looking to pass on the cost of security screening to them and they didn't believe that they should have to pay for that. Back to our primary recommendation, we truly believe that a national levy applied equally across all passengers, regardless of their ports, destinations, airlines, would be an appropriate way, equitable way, for national security screening to be in place. If that was the case, then Rex would have no reason. The really frustrating thing in terms of Rex was that they actually had a higher proportion of the route or the market before they left the route of Adelaide to Whyalla. So, looking through their eyes, they would have consequently paid more security-screening costs than Qantas because of their passenger numbers, and I think I could say with confidence that the animosity between Rex and Qantas is on the public record and well known. So I suggest that, as I said, they on principle decided that that was the reason for departing Whyalla. It was also interesting that it was just after they departed Whyalla that they looked to commence their routes on the eastern seaboard which we know subsequently didn't play out well for them. So, whether they did have different motivations for leaving Whyalla than just the fact that they had the on-principle objection to paying for screening, we don't know. We can only speculate whether they had motives other than their stated grievance with us. Senator LAMBIE: It is a shame that the government can't tax everybody flying around in Australia to pay for this, because what would it be—50c or 20c or something extra on a ticket? It's a dollar, is it? Mr Commons : I think it would be a dollar, yes. If I can be so bold— Senator LAMBIE: Please. Mr Commons : with our recommendation to the committee, there is no reason why the federal government cannot introduce a national levy. Senator LAMBIE: Yes. It's just lack of courage. It doesn't care about rural and regional people, mate; that's why. Mr Commons : I'm not sure what the motivation would be. CHAIR: One more question. Senator LAMBIE: Thank you for that. If Whyalla Airport could be handed back to the federal government to own and operate, would the council agree to that? Is that something that maybe you have thought about? The reason I'm asking that is that I don't know what your upgrades and improvements look like. Do you have the costs to cover that in the next five or 10 years? What happens here? Mr Commons : Our community is looking at having to continue to pay for and subsidise the airport. As I mentioned, our current operating deficit is about $1.5 million. So that $1.5 million basically is coming from our ratepayers at this point in time. That's to cover the day-to-day operations of the airport. There is a view that we don't need to fully cover the depreciation costs of the airport, and we recently got agreement from our audit and risk committee and our council that we'll now only cover 50 per cent of the depreciation costs, noting that, when we do have a significant upgrade to the asset—for example, the recent upgrade of our runway. That was funded, ostensibly, by the federal government and the state government, so council didn't have to pay for the upgrade—which, reflecting back to the Broome context, they had to pay for that themselves; they don't get government subsidies for that. But that $1.5 million deficit then only reduces to about $900,000, so we're still asking our residents, many of whom are unemployed or who have socioeconomic challenges et cetera, to pay more in terms of council rates to cover the council costs, which include this deficit for the airport. Sorry, that was a roundabout answer. Your very direct question was: would council give it back to the federal government? I have to caveat my next statement—that it would be a council decision, but we have had discussions. The fact that it is causing a significant financial drain on council and our community means the answer, I'm very confident, would be yes, we would hand it back if we could. Senator LAMBIE: There you go. What about Broome? CHAIR: He owns it himself! Senator LAMBIE: That's right. They're private. My apologies—you're lucky. I don't blame you. CHAIR: Mr Lane, if you wouldn't give it back to government, give it to us! Senator LAMBIE: No, it's very sad. Mr Lane : You can buy it back anytime you like! Senator LAMBIE: Would you like to buy Whyalla? CHAIR: Mr Lane, a question to you, and it's on the same point, which is the economics of privately operating, as you said, one of the only regional airports—Darwin is pseudo-regional—in north-western Australia. What are the key differences to operating a metro airport? What are the major points of difference? Mr Lane : Seasonality and passenger volume. Generally these deals with airlines are based on a passenger movement charge. So, if you can have a higher volume of people spread out over the course of the year as opposed to very seasonally adjusted through the high season in Broome, then of course that reduces the per-passenger charge and therefore, as my colleague mentioned, it reduces the cost burden on those passengers as well. CHAIR: I don't want to press too hard for information that's commercially sensitive. We got a figure of $54 off Whyalla as their security charge. Are you prepared to share your different passenger movement charges and security charges—anything like that? Mr Lane : It's commensurate with that. We recently outsourced our security as well. We were running and operating that ourselves. We've just outsourced it to a company called MSS, and we've done that primarily because we believe that security is a highly compliant and stringent business and that it is better off in the hands of the experts. We charge for passenger movement through the screening each way, but the airline basically pays for that on a cost-neutral basis. So we don't make any money out of it; it's purely a service to the airline in the airfares. CHAIR: But it's of a similar quantum? Mr Lane : Yes, that's correct. CHAIR: What are they charging for a flight in and out of Broome now? What sort of percentage of the ticket price does that make up? Mr Lane : If I had to combine the two—the passenger movement charge and the security fees—it's probably around 10 per cent on average of the airfares. Broome, again, is different to a lot of regions. We are very remote. As I mentioned, we're 2,000 kilometres away from Perth and are probably one of the most remote regional towns in Australia. We're living in a highly climatic condition, with a very strong high season but equally a very, very strong wet season, which reduces the number of passengers that come in on an annual basis. Equally, that environment leads to a lot of infrastructure upgrades that we're required to do, combined with the compliance and safety regulations that we are required to do—and I add that we're not arguing about the implementation of the safety or compliance regulations, because it's paramount. What we're saying is that there is probably a fairer way of doing it, ensuring the cost of delivery of those standards is shared equally and evenly across Australia. At present, I believe that regional passengers are effectively paying a premium to access the same level of safety and compliance that all other Australians rightly expect. CHAIR: Again, bearing in mind commercial confidentiality, what sorts of passenger numbers are you doing a year? Mr Lane : Just under 500,000 a year. Again, I preface that by saying probably 80 per cent of those are condensed to six months of the year. Broome is fortunate to an extent in that we have an oil and gas business that underpins a lot of that seasonality. Without that business, basically, propping Broome up—for lack of a better word—it would be a very, very different story. We would lose airline capacity. There'd be no investment in the town in terms of infrastructure—hotels, restaurants, bars, cafes and that sort of stuff. CHAIR: Ticket affordability is linked to that base demand, is it? Mr Lane : Yes, 100 per cent. For sure. CHAIR: When we were in the Northern Territory, in a chat, maybe a private chat, they were talking about not taking into account the biosecurity and the national security and being the front line of infrastructure. Are you compensated for that anymore? Are your facilities used for that significantly? Mr Lane : No. It's a topical debate. We're actually in conversations with the federal government at the moment. We are what they call a 'first port of entry' airport. We're already compliant in that area. We're currently building our Border Force facilities. Again, I highlight, in the investment that a private business is making in opening up the north-west of the state, that Border Force facility is costing us, or is quoted to cost us, upwards of $6 million. There is no ROI on that at all for the stakeholders and the owners of the airport. It is done purely, and will be done purely, to open up and for the benefit and the liveability of the people who live in the north-west of Australia. I have gone to Canberra to meet with different ministers to request an interim Border Force solution where we have both ABF—Border Force—and DAFF allowing us to operate while we're building those facilities. At the moment, the answer to that question, or that plea, has been a resounding 'no'. My view—without being too cute about it—is that the government should be literally bending over backwards to try and support a private business that's trying to do everything it can to open up the state, but the result, or the position, to date has been completely the opposite. CHAIR: That would be a barrier to being a more international first point of entry. Are there any other barriers to domestic or international for you? Mr Lane : What they call NPPC, which is the National Passenger Processing Committee, approval—if we got that, we could have flights from Singapore and Bali flying into Broome tomorrow. The problem is not airline interest; it's federal government approvals. CHAIR: It's interesting that you say 'airline interest'. The closest major airport near me is Newcastle, and I was involved prior to 2022 in some of the funding to upgrade the runways and the terminal there. It was a great promise of 'build it and they will come', and they have built it and they have not yet come. You're saying you could get airlines. Does that need cabotage or anything? Mr Lane : No. CHAIR: Really? Wow. There's no funding required? Nothing like that? Mr Lane : In discussions to date, no, because Broome has, I guess, a small advantage in that we're multifaceted. We're an outbound and an inbound destination. We're a tourism attraction plus a resource attraction, plus corporate government departments want to fly in and out, so there is demand. We also have proximity to South-East Asia. We're one of the closest destinations to Singapore, Thailand and Bali. To put that in perspective: I won't mention the airline, but I've had conversations with an airline. To fly direct from Denpasar into Broome we're talking about just over two hours each way and an airfare of circa $400 return. Compare that to what a Broome local has to do today. If you're living in Broome and want to travel to Bali, you've got to jump on a plane, go down to Perth and then fly back over your home to have your holiday, at about four times the price of flying direct and four times the length of time. CHAIR: From a business connectivity perspective, what is the standard ticket price from Broome to Perth? Mr Lane : It fluctuates seasonally, but it's not unusual to pay $1,200 return. CHAIR: So suddenly Denpasar becomes a business hub for you, rather than Perth. Senator LAMBIE: They can go to Asia three times! Mr Lane : Absolutely—100 per cent. They don't then think about the inbound opportunities with tourism. We could be tapping into the millions of Europeans that fly into Bali each year. If we got one per cent of those, it would be a significant financial contributor not only to Broome but to the broader north-west of Australia. Tapping into the backpacker market and the youth market—they could travel down the west coast as opposed to the east coast of Australia, which is sort of inherently what happens, notwithstanding some of the changes or proposed changes to the working holiday visa, which is probably for another conversation. But, from a liveability perspective, from a social currency perspective, it would be huge. It would be a game changer for the region, which is why I'm so surprised that we haven't really been—you know. CHAIR: Yes. I hear you. Senator Lambie asked virtually every question I've got here for Whyalla other than one. I think you said you're 40 per cent down in passengers. Am I right in believing from the evidence that, even if you're operating at 100 per cent of what you were pre-COVID or previously, you think you'd still be operating your airport at a loss? Mr Commons : That's correct. However, the time— CHAIR: What would you need to fix that? Mr Commons : Sorry, I haven't done the modelling of, if we got back up to 80,000, how close we would be to actually breaking even. I could take that question on notice and come back to you. As has been stated, I'm sure, multiple times, a lot of our costs are fixed. The only variable costs that we've got would be in terms of security screening, which, again, we've touched on. So, if we had an increase in our passenger revenue because of increased passengers back up to pre-COVID levels, I reckon we'd be getting pretty close to breaking even. But I'll take that question on notice and send some information through. CHAIR: I'm happy for you to do that. With the status of your airport as a physical asset, is there anything you think is deficient at the moment or would require funding, or are you pretty happy? Mr Commons : We're pretty happy in terms of all of the essential infrastructure. We've just had a close to $30 million upgrade to our runway, so we can now comfortably take the Q400. That was triggered by Qantas upgrading their network to the Q400. I'll just quickly add something. I'm not sure if you're aware that Qantas has only three aircraft that service all of regional South Australia at present. So back to your previous comment about, 'If you have a couple of people call in sick, what's the knock-on effect?' if we have a situation where one of those planes is taken out of service for any period of time, that does have an impact on the broader South Australian regional context because flights do get impacted accordingly. The fact is that we've only got two flights in and out each day and nothing on Saturday. That can have an impact. Just giving an example of that, we've had a couple of visitors from Adelaide University. They have now approved the merger of the University of Adelaide and the University of South Australia. We've got a campus here. We've had two occasions where we've had a significant delegation of Adelaide University people come in for a Friday morning and planning to go back Friday evening or in the afternoon. On two separate occasions, for different reasons, their flight has been cancelled and, with no flight on Saturday, we've had a delegation of 15 or so people either staying in Whyalla for an extra couple of days or, more likely, wanting to get back to Adelaide and so having to take hire cars and drive back on a Friday evening to get back for personal commitments over the weekend. Senator LAMBIE: It sounds like Ceduna actually. It has the same damn problem, just about, doesn't it? Mr Commons : Yes. As was mentioned by the one of the previous speakers, particularly when a lot of the GPs and allied health professionals that are needed in the region come through Whyalla, if their flight is either cancelled or delayed, that has a significant knock-on impact. So that reference to people not getting access to their treatment or their specialists is a very real occurrence. Unfortunately, I don't know why it is. I'm sure you've got a much better insight through this inquiry. But the reliability of the aviation industry pre COVID versus now is chalk and cheese. As was mentioned by one of the previous speakers, Madeleine, more and more we have people having to fly in the day before or make contingency plans for, if their flight is cancelled, how they are going to get back to Adelaide or back home. It is a major challenge. Senator LAMBIE: So you'd be losing a few people who'll just say: 'You know what? I'm just going to get in a car and drive.' Mr Commons : Yes. CHAIR: Mr Lane, I saw you lean forward when the issue of cancellations came up. Did you have something on that? Mr Lane : The frustration of any airport is cancellation, especially in regional areas and especially in your peak season. We had a few cancellations from engineering breakdowns. Again, there are the vagaries of running a regional airport with increased bird strikes and things like that. We had one time where the captain was sick. You can't help these sorts of things. But getting a new captain back up to fly the plane, especially for the last flight out for the night, is tough. It adds severe consequences for the passengers on those planes when they're in a tourism town that doesn't have a spare room in it. What do you do with 200 passengers that are not a four-hour drive away from a capital city but a 24-hour drive away? So, yes, it's a bit frustrating. That's why I have my hair cut! CHAIR: Thank you very much. If you've taken anything on notice—and, I think, Mr Commons, you're going to get some modelling to us—please get it to us by Friday 2 October 2026. Proceedings suspended from 15:30 to 15:42 .