The government will extend its program to supplement domestic flights by eight weeks from 31 January until 28 March 2021.
Deputy Prime Minister Michael McCormack also said he was extending a 50 per cent waiver of domestic air services charges for regular and aeromedical flights until 31 March 2021.
The Domestic Aviation Network Support (DANS), first unveiled in April, covers all capital cities and initially allowed the Qantas Group to increase its network from 105 to 164 per week; and Virgin to shift from running only Sydney-Melbourne services to flying 64 return services.
DANS had been due to end on 31 January and the news puts it in line with a similar extension for regional routes.
“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,” said Deputy PM McCormack.
“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 2 per cent of its network.
“Government assistance was critical to maintaining a minimum level of aviation connectivity
“Through the COVID-19 crisis, DANS — along with the Regional Airline Network Support (RANS) program — has enabled more than 600,000 passengers to travel across our country, including essential workers in health care, social services and law enforcement.”
The TWU, however, criticised the help and said it should be linked to conditions, highlighting Qantas’ decision to outsource ground handling jobs.
“This is no strings attached corporate welfare at its worst. The federal government is opening the public purse to the likes of Qantas without ensuring that the taxpayer is getting a good deal,” said national secretary Michael Kaine.
“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.”
DANS, which was initially valued at $165 million, was introduced after reports emerged of Australians arriving back in the country, completing their 14-day hotel isolation, but then struggling to find flights across states to return home.
The extension also comes despite a recent upturn in domestic flying, with Qantas alone targeting a return to 80 per cent capacity in the first quarter of next year.
In a market update to the ASX earlier this month, the business, which includes Jetstar, said it expects to be close to break even at an underlying level in the first half of this financial year, and be “net free cash flow positive”, excluding redundancies, in the second.
Chief executive Alan Joyce said then, “We’ve seen a vast improvement in trading conditions over the past month as many more people are finally able to travel domestically again.
“There’s been a rush of bookings as each border restriction lifted, showing that there’s plenty of latent travel demand across both leisure and business sectors.
“Between Qantas and Jetstar, there were over 200,000 fares sold for flights to Queensland in 72 hours after the border openings with Sydney and Victoria were announced. We’re also seeing people booking several months in advance, which reflects more confidence than we’ve seen for some time.”