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Domestic aviation to ‘fully recover’ by end of year, says budget

written by Adam Thorn | May 11, 2021
A Virgin Australia 737 8FE departing YMML at sunset by Victor Pody

Domestic aviation is expected to “fully recover” by the end of the year, the 2021 budget has predicted.

Treasurer Josh Frydenberg’s address contained no new major announcements for aviation but revealed domestic routes have already returned to 70 per cent of pre-COVID levels.

It comes as it was revealed on Sunday that Australia would move its official estimate as to when its international borders will reopen from later this year to 2022.

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The budget document released on Tuesday evening read, “In this budget, the government is providing additional support to keep planes in the air and to preserve an international airline capability. This builds on the $2.7 billion of support provided during the height of the crisis.

“The government is extending the successful Domestic Aviation Network Support and Regional Airline Network Support Programs until 30 September 2021.

“Already the number of weekly flights on major domestic routes have returned to around 70 per cent of pre‑COVID levels and are expected to fully recover by the end of the year.

“The government is also extending the partial Airservices Australia fee waiver and reinstating the domestic aviation security charge rebate, keeping operators’ costs low as the sector continues to recover.

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“A new $200 million International Aviation Support payment will preserve an Australian international airline workforce and operational capability. This will protect up to 8,000 jobs and enable international flights to resume when borders reopen.

“The government is also ensuring businesses in regional Australia remain connected to key international markets by extending the International Freight Assistance Mechanism.

“So far this support has helped Australian businesses export nearly half a million tonnes of agriculture and seafood products valued at more than $6.6 billion.”

In March, the federal government announced it would supplement airfares for passengers to 15 destinations including the Gold Coast, Alice Springs and Kangaroo Island. It follows the end of JobKeeper later that month.

The package of measures to support aviation in Australia also included a new wage subsidy for those working in international aviation; cheap loans to small businesses coming off JobKeeper; and a six-month extension of the ‘RANS’ and ‘DANS’ supplemented routes initiative.

The scheme has proved hugely successful. By the end of April, more than three-quarters of the 800,000 cheap fares were sold, leading the government to announce it could extend the initative.

It led to Qantas and Jetstar announcing they would soon be flying more aircraft on their domestic routes than before than pandemic, and Virgin pledging to hire 150 new cabin crew and lease 10 new 737s because it was “committed” to restoring its pre-COVID market share.

It’s still unknown as to exactly when the government’s new wage subsidy for those working in international aviation, essentially the same as JobKeeper, would expire, though it is expected to last until international borders open.

More to follow…

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