COVID-19: Australia pumps a billion into tourism industry

Today the Australian Government announced an AU$1.2 billion package to support the tourism industry. Everything from discount flights to business loans and other support for airlines, airports, hotels, caravan parks, restaurants, bars, travel agents and tourism operators.

The package includes half-price airline tickets, cheap loans for businesses and direct support for aviation workers. And they even have a name for it, because Mr McCormack thinks country folk like an acronym:

“The new Tourism Aviation Network Support (TANS) Program will give Australians clear incentives to travel to key domestic tourism areas,” the Deputy Prime Minister said.

Michael McCormack, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development

Half price travel tickets!

The package includes half-price airline tickets. And you even have time to plan, as they won’t go on sale on airline websites until 1 April 2021 – and that’s not an April Fools day joke.

However, you can’t just fly anywhere. You have to fly to one of 13 prescribed destinations, and they are:

• Alice Springs and the Lasseter region (which includes Uluru (NT)
• Avalon (VIC)
• Broome (WA)
• Burnie (TAS)
• Cairns (QLD)
• Devonport (TAS)
• Gold Coast (QLD)
• Kangaroo Island (SA)
• Launceston (TAS)
• Mackay region (Proserpine and Hamilton Island) (QLD)
• Merimbula (NSW)
• Sunshine Coast (QLD)
• Whitsundays (QLD)

The ‘half-price’ will apply to the average price of a ticket, and they can only be offered by airlines who have operated the route for two years or longer. That should stop some fly-by-night operators opening routes specifically to take advantage of the government subsidy. Oh, and there is a limit of 800,000 tickets, or roughly 46,000 tickets per week from April till July 2021.

Some odd results

But there will be some weird results. For a start, if you try to book accommodation in Broome, as I did yesterday – before the announcement, or around Uluru (Ayers Rock) then you will find the hotels are already booked out. Alice Springs is one of the 13 destinations, as is Broome, but good luck in finding accommodation and available tours.

But in capital cities – Hotels, at least those that aren’t being used for hotel quarantine for returning travellers, remain vacant, but won’t receive the benefit of half-price fares from this package.

More than just cheap tickets

The package is wider than just these half-price tickets. As well as providing low-cost loans in co-operation with banks for small tourism-related businesses (SME Loan Guarantee Scheme), other aspects of the package include:

• New International Aviation Support for Qantas/Jetstar and Virgin Australia to maintain 8,000+ international aviation jobs
• Support for passenger airports to meet domestic security screening costs
• Aviation Services Assistance Support Program to assist ground-handling companies meet the costs of mandatory training, certification and accreditation for when the market expands again.
• Domestic aviation security screening cost rebates for 50+ airports

There are also extensions to existing schemes in support of airlines to 30 September 2021:

• Domestic Aviation Network Support (DANS) and Regional Aviation Network Support (RANS) programs
• 50 % waiver of domestic air services charges for Regular Public Transport (RPT) and aeromedical flights
• International Freight Assistance Mechanism.

Existing tourism related benefits have also been extended:

• Business Events Grants Program (AU$50 million) extended by 3 months. This covers up to 50% of the costs of multi-day business related events in 2021.
• Zoos and Aquarium program (AU$94.6 million) extended by 6 months
• COVID-19 Consumer Travel Support Program extended for three months

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.

This announcement is very welcome, but in some respects it seems primarily a political recovery plan rather than an economic and tourism industry related post-COVID-19 plan.

While the pumping of this kind of money into the aviation, tourism and related industries will certainly assist in recovery, the destinations targeted by the half-price fares seems odd, when some of those destinations are already saturated with bookings.

My contacts in the travel industry say Broome and the Kimberleys are largely ‘full’ for June to August 2021, as is Central Australia (Alice Springs/Uluru). Only Queensland has excess capacity, and even there popular destinations like Hayman Island are virtually booked out.

Still, I’m looking at dates!