Security screening was due to be installed at Armidale Regional Airport in the coming months, but it is now on hold, and Armidale Regional Council may have to pay back $1.8 million to the federal government, despite already spending some of that funding.
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At the same time, it has smaller air services that are pushing back against having security screening installed.
Late last year the council received the funding to set up the screening at the airport, in line with new federal regulations.
But South Australian senator Rex Patrick is attempting to have the regulation requiring security at regional airports scrapped, fearing it will increase the cost of flying for passengers.
Last week, the senator questioned local council representatives, including the mayor and general manager of business Scot MacDonald, at a Rural And Regional Affairs And Transport Legislation Committee hearing, which was held via teleconference.
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While the council explained their predicament to the decision makers in Canberra, mayor Simon Murray told The Armidale Express that council may be required to introduce security at the airport regardless of what decision the federal parliament makes.
And that's because Qantas has started flying bigger aircraft into the city, which triggers a need for security screening. At the moment the airport has an exemption from security screening because of the coronavirus pandemic.
Cr Murray said the other two carriers into Armidale, Regional Express and Fly Corporate, have indicated they were not keen on bearing the extra cost of having security.
The mayor confirmed the cost would be $12-15 per passenger.
"The argument by REX and Fly Corporate is that they do not want to have security screening, because it would be an impost on them as far as cost goes," Cr Murray said, adding that the cost would be added to the price of a ticket.
"But when you've got REX and Qantas doing the same run, then there's a potential inequity if one has to have security and one doesn't."
Mr MacDonald told last week's senate inquiry that the council had received advice on February 4 to postpone the installation.
"So we're a little bit in no-man's-land at the moment. We'd hoped that the Senate debate was going to be on 5 May, and in the meantime we were just getting on with putting the infrastructure in."
Senator Patrick had moved to disallow the Aviation Transport Security Amendment (Security Controller Airports) Regulations 2019 which subjects aircraft that seat 40 or more people to mandatory security screening.
In the meantime, the council has already received the security equipment, paid for with the government funding.
Mr MacDonald told the Senate committee the council had started ordering equipment, out of the United Kingdom, when the funding arrived around Christmas and he said that had been a bit of a process.
"It's finally in transit," he said. "And then we have various other expenses ... things like backup of the generators, CCTV and all those sorts of things."
He said they had most, if not all, of that underway when they got the postponement advice on February 4.
"The dilemma that we're facing is that we foresee that, in the next number of years - we're not sure how soon, but the next two or three to five years - the smaller Qantas planes and the smaller Rex planes will probably go, and we'll be looking at the larger QF400s.
"That puts us in a position of needing security," he said.
But if the regulation is disallowed, the airport would no longer be eligible for the grant and the $1.8 million would have to be repaid.
"If they then turn around, and make us pay what they've already granted us, we've effectively got equipment that we've paid for, and then we've got to pay the government back," Cr Murray said.
"So that's what we're arguing make up your mind what you want to do."