Regional travellers and businesses are paying up to 52% more to fly than city passengers, as more than half of regional airports operate at a loss and key routes rely on a single airline.

The state’s peak business body has warned that without urgent reform, small and medium-sized businesses across regional NSW will face higher operating costs, reduced access to customers and suppliers, and fewer opportunities to grow.

The warning comes as Business NSW releases its policy paper, Keeping Regional NSW Connected: The Future of Our Airports, which sets out a long-term plan to strengthen regional aviation and support economic growth.

“Regional airports are economic lifelines for small and medium businesses,” CEO Daniel Hunter said.

“They connect local businesses to markets, workers and supply chains. When those links weaken, SMEs are hit first and hardest.”

More than half of regional airports are financially unsustainable, operating at a loss of around $200,000 on average each year, while about 60% of regional and remote air routes are serviced by a single airline, limiting competition and choice.

“The collapse of Bonza and challenges facing Rex showed how quickly regional communities can lose critical services,” Mr Hunter said.

“For SMEs, that can mean disrupted supply chains, lost customers, delayed freight and higher operating costs almost overnight.”

Mr Hunter said the opening of Western Sydney International Airport presents a critical opportunity to strengthen regional aviation and improve access to domestic and global markets.

“Western Sydney International has the potential to be a game changer for regional NSW,” he said.

“By opening new slots and opportunities for regional airlines, it can drive greater competition, more choice and better connections for regional businesses, exporters and travellers.

Mr Hunter said about 68,000 people relocated from Sydney to regional NSW between 2016 and 2021, reinforcing the need for reliable air connections.

Regional airports also play a critical role in essential services, with 93% supporting Royal Flying Doctor Service operations and 71% supporting disaster response activity.

Business NSW said ageing infrastructure and limited access to Sydney Airport slots are further constraining business, tourism and freight connectivity.

Business NSW is calling on the NSW and Commonwealth Governments to act, including a 10-year Regional Aviation Strategy, a Regional Aviation Infrastructure Fund, improved reliability and affordability of regional air services, and guaranteed regional access at Western Sydney International Airport.

“Regional airports are not optional infrastructure – they are critical to keeping SME businesses connected, competitive and growing,” Mr Hunter said.  

About Business NSW 

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826. We represent almost 50,000 businesses.

MEDIA CONTACT: MARISE DONNOLLEY – 0467 221 802