Western Australia's Regional Express (Rex) airline says the federal carbon tax could put increased pressure on regional air services, noting that the company now expects to pay A$2 million (US$2.1 million) extra in the first year, reports the Western Advocate, according to the Shipping Gazette.
Rex chief operating officer Chris Hine said while it would add only $2 to the price of each ticket, even small increases impact demand. If they stopped just one person flying, he said, that would force ticket prices up or threaten services.
"The perception is that we should simply pass that extra cost onto customers without that causing any impact on demand, but we know through experience that simply adding $2 here, $2 there, will affect demand and make that ability for air travel harder and harder."
Mr Hine said cuts to regional airlines' services or higher ticket prices would also push more movement on the road, defeating the purpose of the carbon tax.
Liberal Opposition Leader Tony Abbott said one of the biggest impacts of the Labor government's carbon tax would be on regional Australia aviation and that this would add to cost-of-living pressures.
"Ultimately, as the carbon tax goes up and up and up, there will be pressure on services, potentially cuts in services and that means the quality of life in regional Australia goes down," said Mr Abbott.