COVID-19: Australian government subsidises domestic network

The Transport minister Michael McCormack, as previously foreshadowed, announced on Thursday night an AU$165 million package funding Australian domestic flights between all capital cities and to major regional centres including Albury, Alice Springs, Coffs Harbour, Dubbo, Kalgoorlie, Mildura, Port Lincoln, Rockhampton, Tamworth, Townsville and Wagga Wagga to name a few.

These government underwritten flights will charge ‘normal’ fare prices and run from Friday 17 April through until Sunday 7 June 2020.

Background

Demand and actual domestic flight regularity have dived off a cliff since 23 March, when Australia started towards isolation, and various states including Queensland, South Australia, Tasmania and Western Australia closed their borders.

Virgin has effectively grounded its domestic and international fleet, with the exception of one aircraft to fly once, 6 days a week between Sydney and Melbourne. Under this new funding arrangement, Virgin will operate 64 services each week starting on Friday 16 April. The funding will also allow some of its 8,000 previously stood down employees to return to work.

Qantas which has continued flying domestically albeit at a drastically reduced frequency of only 105 flights per week, will increase those to 164 flights per week. To give you an idea of the current reduction in flight, Qantas used to fly between Sydney and Melbourne 50 times a day, but since the pandemic and up until Friday, it has only been flying that route 5 times a day.

Qantas will be servicing a total of 36 capital cities and regional centres.

Flights on both airlines will be low-fuss. Reduced service and catering, with some physical distancing, although that will probably be achieved by the sparsity of passengers rather than rationing of seats.

The solution to picking winners

With Virgin Australia in a difficult financial position and asking initially for a loan of AU$1.4 billion and then for a guarantee from the government that doesn’t want to appear to ‘pick winners’, but neither wants to provide proportionally equivalent funding to Qantas, money that Qantas had asked for on the grounds of fairness, but which it doesn’t really need, this underwriting of domestic flight costs, is a winning solution.

Virgin return flights per week:

These flights will be rolled out starting on Friday 17 April through until 7 June 2020. Exact day and times have not yet been released by Virgin. We will update this post when we know more.

Qantas return flights per week:

Qantas is classifying its routes as ‘Trunk’ and ‘Regional’. Again they will start being rolled out from Friday 17 April and currently run until Sunday 7 June 2020. Frequencies have yet to be released

TRUNK ROUTES

• Sydney – Adelaide
• Sydney – Brisbane
• Sydney – Canberra
• Sydney – Melbourne
• Sydney – Perth
• Melbourne – Adelaide
• Melbourne – Brisbane
• Melbourne – Canberra
• Melbourne – Hobart
• Melbourne – Perth

REGIONAL ROUTES

New South Wales

• Albury – Sydney
• Armidale – Sydney
• Ballina – Sydney
• Coffs Harbour – Sydney
• Dubbo – Sydney
• Lord Howe Island – Sydney
• Tamworth – Sydney
• Wagga Wagga – Sydney

Queensland

• Brisbane – Cairns
• Brisbane – Emerald
• Brisbane – Gladstone
• Brisbane – Mt Isa
• Brisbane – Longreach
• Brisbane – Mackay
• Brisbane – Moranbah
• Brisbane – Roma
• Brisbane – Rockhampton
• Brisbane – Townsville
• Cloncurry – Mt Isa
• Cloncurry – Townsville
• Cairns – Horne Island
• Cairns – Townsville
• Cairns – Weipa
• Charleville – Roma
• Mt Isa – Townsville
• Mackay – Rockhampton
• Mackay – Townsville
• Townsville – Rockhampton

Western Australia

• Newman – Perth
• Broome – Perth
• Geraldton – Perth
• Kalgoorlie – Perth
• Learmonth – Perth
• Port Hedland – Perth
• Karratha – Perth

2PAXfly Takeout

This is another timely reminder to wear your seatbelt when seated. Holding you close to your seat will protect you from the sort of injuries sustained on this flight, when unsecured passengers flew to the ceiling of the aircraft, and then came crashing down once the ‘drop’ ceased.

The hope will be that this is an anomaly – a ‘freak accident’ in casual parlance. If it is a systemic error either mechanical or electronic, then this is a larger concern for the airlines that fly Boeing Dreamliner 787 aircraft. Let’s hope it isn’t. If it is, it will pile on the woes to Boeing’s existing stack.

With border closures that mean 14 days isolation for people entering the state, if they don’t get turned around; businesses telling their employees not to fly and a general public disinclination to fly, I suspect a lot of these will go nearly empty of passengers for a while, although they may be chok-a-block with freight.

On the other hand, this is a way to even-handedly supply some funds from government to both airlines, while preserving these routes for the passengers and freight that does need to travel. It also means that once social isolation starts to be selectively removed, the air transport infrastructure will already be operating.

Its much easier to start from something than nothing.

I think this is a smart move. At minimal cost, this funding will accomplish multiple goals.