COVID-19: Australian Government may subsidise domestic flights

In an interview on ABC TV News Breakfast this morning, the Deputy Prime Minister Michael McCormack told Michael Rowland, that he had spoken to Qantas and Virgin Australia over the weekend about covering any losses incurred from keeping domestic airline operations going.

McCornack is also the leader of the National Party, which represents rural and remote communities, so he is also interested in preserving air services to those communities.

Another issue is the repatriation of Australian Citizens returning from overseas and being kept in quarantine. They must stop in the capital city they arrive in for their 15 days of isolation before returning to their home city. One of the difficulties for these returning tourists has been the lack of domestic, primarily capital city to capital city flights.

McCormack said he had been talking to Alan Joyce (Qantas) and Paul Scurrah (Virgin Australia) over the weekend about subsidies for domestic flights to ensure the ‘trunk routes’ between capital cities were maintained. He also said:

“We did put AU$198 million on the table to service those 138 regional routes, so we are serviced by our regional airlines to get vital medical supplies, indeed vital medical personnel into those centres, but we also need to, of course, transfer people around from capital city to capital city, so we’ll be looking at that.”

Michael McCormack, Deputy Prime Minister, on ABC News Breakfast, 13 April, 2020

Both Qantas and Virgin Australia have effectively suspended their international operations, with the exception of some repatriation flights.

Virgin Australia is currently only flying one return flight per day between Sydney and Melbourne, with the Qantas group flying one aircraft under each of its brands (Qantas, Jetstar, QantasLink) per day. The subsidy should enable the airlines to re-instate some domestic flights to service not only those Australians returning to capital cities after their mandatory isolation periods but also assist with the transport of essential medical and other workers.

2PAXfly Takeout

I’m shocked at how demand has contracted since I did my last domestic flight around 4 weeks ago. Then, the planes I was on were around 25% full. Obviously things have got a lot worse for the airlines. Even then, I didn’t want to be travelling and was relieved when I returned home.