Nearly three-quarters of regional airports across Australia reported an operating loss in 2024-25, with councils and ratepayers effectively subsidising air connectivity for their communities, according to new data submitted to the Productivity Commission’s inquiry into regional airfare determinants.
The Regional Airports Financial Sustainability Survey 2026, commissioned by the Australian Airports Association (AAA) and Regional Capitals Australia and conducted by ACIL Allen, found 73 per cent of surveyed regional airports recorded an operating loss last financial year, with a median loss of $519,000. The figure is higher than interim findings previously referenced by the Commission, following an expanded survey sample.
The results also revealed 67 per cent of airports had deferred or delayed capital investment, and 85 per cent reported limited capacity to invest in service-enabling infrastructure.
The findings were submitted to the Productivity Commission alongside its release of a What We Heard paper as part of the regional airfare inquiry, which acknowledged that participants had highlighted the numerous ways air services underpin life in regional Australia – from access to essential services through to economic activity and social connection.
AAA CEO Simon Westaway said the data illustrated the mounting pressure on airports that lacked the ability to influence the airline-side factors that most affect regional airfares.
“Regional airfares are shaped by a complex mix of factors including demand, airline competition, aircraft availability, route economics, security costs and airport infrastructure,” Westaway said. “Airports in regional and remote Australia are only one part of that picture, and in many cases they have limited ability to influence airline pricing, fleet allocation or capacity decisions.”
What regional airports could control, he said, was whether communities retained safe and reliable aviation infrastructure – and that was becoming harder to guarantee each year.
“Many are doing so while operating at a loss, with councils, ratepayers and airport operators effectively picking up the tab to keep regional Australia connected,” Westaway said. “Governments need to be part of the solution to ensure this network doesn’t fail in the future.”
Regional airports support emergency medical flights, disaster response, freight, tourism and business travel, functions Westaway described as essential public infrastructure rather than commercial operations.
The AAA is calling for a sustainable policy framework that recognises regional airports in those terms and ensures funding models reflect the critical services being provided. The association said it would continue to participate in the Productivity Commission process ahead of its final report.
