Canberra extends A$1.2bn lifeline to Australian carriers

Australian airlines have embraced the government’s AUD1.2 billion Australian dollar (USD930 million) stimulus package for the country’s aviation and tourism industry, which includes 800,000 half-price airline tickets, cheap loans for businesses, direct support to keep aircraft flying and airline workers employed. Welcoming the lifeline, the Qantas Group and Virgin Australia (VA, Brisbane Int’l) said it would be a major stimulus to help fast-track the recovery of domestic tourism and get international operations ready for take-off for when the country’s borders re-open. “The economic impact this will have cannot be underestimated. This is a once in a generation event that is going to give the entire tourism industry supply chain a significant boost, which it desperately needs,” said Virgin Australia Chief Executive Officer, Jayne Hrdlicka. “In total, this package is a lifeline for the broader travel and tourism sector in Australia, just as it’s trying to get back on its feet. Ultimately, it’s an investment in an industry that has always been a huge driver of economic activity and will be again,” agreed Qantas Group Chief Executive Officer Alan Joyce. The new stimulus package tops the government’s AUD285 million (USD221 million) Airline Financial Relief Package which ran over six months from April 1, 2020, to September 30, 2020, in response to COVID-19. Announcing the new support, Prime Minister Scott Morrison said Australia’s economy had recovered 85% from COVID-19. This package, combined with the country’s vaccine roll-out, was the next step in the government’s National Economic Recovery Plan to help industries and regions still struggling to get back to normal trading. Qantas and Jetstar revealed they operated at about 60% of their pre-COVID levels domestically during the third quarter of this financial year and projected this would increase to around 80% in the fourth quarter. The Qantas Group tagged at least 8,500 job losses due to COVID, about a third of its workforce. It’s three-year restructuring programme continued due to the financial realities associated with AUD11 billion (USD8.5 billion) in lost revenue since the start of the pandemic. Virgin Australia currently was operating at around 50% of pre-pandemic capacity and expected to reach roughly 70 % of pre-COVID capacity by the Easter break.