The government announced a $298 million bailout for regional aviation on Saturday morning – hours after a help-us-or-lose-us deadline imposed by Rex and eight independent carriers expired.
The package will include $198 million for regional airline routes to 138 communities and a further $100 million for related companies that support the industry. It’s thought the package will last for six months and see service and security charges waived and fuel excise lifted back to its 1 February level.
The news comes 24 hours after Regional Express said it would struggle to transport coronavirus testing samples without a bailout, and eight regional carriers warned the government had washed their hands of them.
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- Rex and the Airlines for Australia and New Zealand Group, hailed the deal, with the former claiming it would have stood down 90 per cent of its staff without it;
- However, four major ground handling businesses said the new package “ignores” them;
- If you’ve been stood down, see our interview with one of Australia’s top employment lawyers to know your rights.
Speaking outside Wagga Wagga Airport in NSW, Deputy Prime Minister Michael McCormack said, “Regional aviation has been smashed by COVID-19. It’s doing it tough.”
He said that while the $198 million will subsidise airlines, the sum will also help cover critical standing costs for safety function, regulatory compliance and minimum operational capability.
An additional $100 million will be made available to provide direct financial support to smaller regional airlines during the downturn, should it be needed.
Airlines, contracted aero-medical providers and a range of other essential service providers can apply for consideration and subject to financial analysis, be eligible for assistance on a month-by-month basis through to 30 September.
Mr McCormack said, “This package guarantees core routes for domestic air freight will remain open and essential workers remain employed, while providing vital financial support for airlines servicing regional and remote locations.
“More than 100 regional and remote airports received a scheduled passenger service last month and this funding will be welcome news for the aviation workforce and the broader communities these services support.
“The funding will ensure regional communities benefit from an ongoing airline service by underwriting airlines’ operating costs on selected routes.”
He added the bailout was “for those people who rely on pharmaceuticals, for those people who rely on those medical supplies, for those people who need to get where they need to be”.
The announcement ended a dramatic week when Australia’s largest independent airline, Rex, said it would announce the “shutting down of its network” on Friday if it hadn’t received “concrete proposals” of financial aid.
The statement further raised the stakes in regional airlines’ battle to secure help. On Thursday, eight independent carriers separately warned they could go out of business in “days rather than weeks” unless the government underwrote Australia’s small airline operators.
Rex deputy chairman John Sharp said then, “The federal, state and local governments all need to act urgently and decisively to determine specific assistance packages so that the airlines can at least provide the bare minimum of essential air services to keep the communities running.”