Federal Government extends subsidies for domestic and regional flights
Australian airlines will receive further support from the Federal Government to ensure regional and major domestic routes are still available to Australians who want, or need, to travel by plane.
The Commonwealth subsidised a several routes earlier this year after demand dropped dramatically and dried up in some cases due to COVID-19.
More than $150 million has been handed to the airlines through the Domestic Aviation Network Support (DANS) program and the Regional Airline Network Support (RANS) program, which covers any costs that the airline cannot cover due to lack of passengers.
That support was due to end soon, but Deputy Prime Minister Michael McCormack has confirmed the upcoming budget will include the extension of the programs to the January 31, 2021, and March 28, 2021, respectively.
“Planes in the air mean jobs on the ground and, as part of our economic plan for a more secure and resilient Australia, we will continue to back our aviation sector,” Mr McCormack said.
The ban on international travel has damaged the airline industry and in another blow to the sector, state border closures have made many routes unviable.
In an attempt to further pressure states to open up, Mr McCormack called on state premiers to consider easing border restrictions.
“The Federal Government is doing our bit by underwriting these flights to maintain minimum connectivity, now we need the states and territories to do their bit too as we again encourage the continued easing of border restrictions,” he said.
The total cost of the extension is dependent on several factors including state border closures and COVID-19 restrictions, but the Government expects it will be hundreds of millions of dollars.
Support for what were Australia’s busiest routes
The DANS program has so far provided financial support to Qantas and Virgin for what were the 50 busiest routes across Australia before COVID-19.
They include Adelaide to Alice Springs, Brisbane to Canberra, Hobart to Sydney and Perth to Sydney.
As state borders up, some routes will not require as much Commonwealth support because more people will board planes for holidays or to see loved ones.
The list of routes to be supported under the extension of the program is still being finalised.
Under the program, airlines have been required and will continue to be required to ensure ticket pricing is reasonable, with the Commonwealth to cover the costs that are not covered due to a lack of passengers.
Regional routes continue despite lack of demand
The RANS program has ensured the continuation of flights to remote communities, despite limited demand.
RANS has supported 270 weekly return services to 111 regional and remote locations across the country.
They include Brisbane to Launceston, Cairns to Mt Isa, Darwin to Broome and Newcastle to Dubbo.
Since April, money has been handed to about a dozen regional operators — including Regional Express Airlines — that have put on flights that have been used to transport medical workers, FIFO workers and freight.
Mr McCormack said he was hopeful the extension of Government support would see regional airlines offer more flights to towns that are desperate for visitors.
“We know regional tourism will help drive Australia’s economic recovery and today’s announcement of further support for key routes will be a big boost to local economies,” he said.
Like the DANS program, airlines will need to offer fares and freight pricing at levels similar to what was offered before COVID-19.