Federal government extends domestic support program for airlines

Adelaide, Australia - March 21, 2016: Planes from domestic air industry competitors and rivals Qantas and Virgin, coming and going from Adelaide airport.

The federal government has extended key assistance measures to support domestic aviation, as well as announcing the appointment of an expert advisory panel, as the sector continues its recovery from the COVID-19 pandemic.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack announced today that the Domestic Aviation Network Support (DANS) program, which had been due to end on 31 January 2021, would be extended for a further eight weeks.

“DANS has provided critical support for the aviation sector and the Australian government has decided to continue it until 28 March 2021, as economic momentum builds and airlines continue to add more flights to meet renewed demand,” McCormack said.

“As we know, air travel was hit hard from the start of the outbreak, with the number of domestic passengers falling from 5.35 million in January to just 344,100 in April.

“Airlines were grounding their fleets, capacity within the domestic network had fallen 92.5 per cent, with Virgin Australia down to just five flights per week between Melbourne and Sydney, and Qantas operating less than two per cent of its network.

“Government assistance was critical to maintaining a minimum level of aviation connectivity.”

According to the Deputy Prime Minister, DANS – along with the Regional Airline Network Support (RANS) program – has enabled more than 600,000 passengers to travel across Australia during the COVID-19 crisis, including essential workers in health care, social services and law enforcement.

“DANS and RANS will continue to support essential freight movements around the country, providing critical access to healthcare equipment, education and mail and enabling numerous industries.”

It was announced in September that RANS had been extended until 28 March 2021.

McCormack said the government was also extending a 50 per cent waiver of domestic air services charges for regular public transport and aeromedical flights from 1 January 2021 to 31 March 2021.

“This will continue to help manage costs for airlines as they bring capacity back online and support more flights to be available sooner,” he said.

Other aviation support measures including the Australian Aviation Financial Relief Package, Regional Airlines Funding Assistance and Ex-Gratia Land Tax relief for leased federal airports will run to their scheduled timeframe of 31 December 2020.

“We are now seeing signs of recovery, with domestic passenger numbers increasing back up to one million in September,” McCormack said.

“Domestic border restrictions have largely been removed, and this is enabling more free-flowing domestic travel over the summer holidays and beyond.”

“The government is focused on keeping Australians connected and facilitating freight movements as aviation emerges from the COVID‑19 pandemic.”

Airlines for Australia & New Zealand (A4ANZ) chairman Professor Graeme Samuel said the program extensions came at a critical time.

“By continuing to underwrite key routes that are not currently commercially viable, the government is ensuring the connectivity of essential workers across the country, enabling the movement of critical freight and the continuation of domestic tourism for Australians,” he said.

“While there are positive signs around demand since border restrictions have eased, it is unlikely that Australia’s domestic capacity will return to pre-COVID levels until late-2021, with international air travel likely to take until 2024. This leaves the airlines facing a very tenuous journey ahead.”

However, A4ANZ chief executive Dr Alison Roberts said there needs to be flexibility in how government support is wound back or reinstated in response to potential outbreaks and/or border closures.

“We would urge caution against withdrawing support too soon,” she said.

The extension of DANS has been met with condemnation from the Transport Workers’ Union (TWU), which is seeking public funding to be tied to commitments from airlines to engage their own employees for work, rather than outsourcing workers and using outside agencies.

TWU national secretary Michael Kaine said the government was failing to protect the taxpayers’ interests, and that the union would write to McCormack highlighting the problem.

“This is no-strings-attached corporate welfare at its worst,” he said.

“The federal government is opening the public purse to the likes of Qantas without ensuring that the taxpayer is getting a good deal.

“Qantas has taken public financial support to keep flying and the JobKeeper payment for its workers, and at the same time, is trashing the jobs of 2,500 ground workers.

“Qantas will instead engage workers through outside agencies on lower pay and conditions. This will affect working families, local communities and hit our economy.”

TWU national secretary Michael Kaine (image source: ABC News)

The TWU began a Federal Court case last week against Qantas over the outsourcing which its arguing will lower standards on safety, security and service.

New expert advisory panel formed

The Deputy PM also announced the establishment of the Future of Aviation Reference Panel, to be chaired by Professor Patrick Murray, to consult the aviation industry on the recently released Issues Paper on the Future of Australia’s Aviation Sector.

Professor Murray, chair of the Aviation Safety Advisory Panel at the Civil Aviation Safety Authority and Professor of Aviation and Logistics at the University of Southern Queensland, will be joined by expert panel members Adrianne Fleming, Andrew Drysdale and Shannon O’Hara.

“Each member brings expert and unique perspectives on various sectors of the aviation industry,” McCormack said.

“The panel will assist the government in its ongoing support of the aviation sector as it carefully recovers from the pandemic and ensure we continue to have a safe, secure and efficient industry for Australia’s future.

“Managing the challenges to aviation resulting from the COVID-19 pandemic will require industry, regulators, governments and the community to work together.

“I thank the aviation industry for their constructive engagement on the Future of Aviation Issues Paper and subsequent consultative workshops to date, and I look forward to announcing the government’s five-year plan for aviation in the new year.”

A4ANZ welcomed the new expert panel, with its CEO saying that members are looking forward to contributing to the development of a five-year plan.

“We welcome these discussions and the focus on ensuring that we have effective aviation policy which delivers better outcomes for the sector, consumers and the economy,” Dr Roberts said.

“The restart for airlines in Australia is uniquely challenging, and we need to give the industry its best chance of long-term survival, ensuring access to affordable air travel and supporting Australia’s economic recovery.”


Featured image source: iStock/BeyondImages

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