Rex Airlines is threatening to cut its Armidale to Sydney service, when security screening of passengers is introduced.
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While the flight service has been suspended during the coronavirus pandemic, the airline has signalled its reluctance to pay for the new security procedure.
But the council has told The Armidale Express that REX would not be required to pay the additional cost.
Armidale Regional Council had announced screening of all passengers would soon be introduced at the airport, as QantasLink was now flying larger planes, which require security screening of passengers.
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All three airlines that fly into Armidale will be required to screen passengers, which had prompted REX's complaint that it would face an additional cost.
Northern Tablelands MP Adam Marshall said he had contacted the council on Wednesday after learning of REX's concerns.
"I chased that up with council this morning," Mr Marshall said.
He said the council confirmed that neither REX of Fly Corportate would be forced to pay the additional charge for security screening, until they were required by law to screen their passengers.
"If that's what REX is going on about it's not happening," Mr Marshall said.
The council confirmed that the airline would not be paying for security screening, but it did say the airline's passengers would have to go through screening before boarding flights.
"In surveys of our passengers, they clearly expressed a preference for passenger and baggage screening," a statement from the council said.
"We have a formal agreement with Regional Express Airlines that their passengers will participate in the security screening.
"By managing the operation of the screening services at Armidale Airport, Council plans to have all passengers pass through the screening processes. Until a new agreement is struck with Rex, there will be no additional cost impact on its services."
The Armidale Express has contacted the airline for comment about its threat to stop its Armidale services.
"Forcing Rex to pay for airport security screening when it is not legally required would play a significant role in Rex's final decision," the airline said in a statement to the ABC on Wednesday.