Australia to aid tourism with 800,000 half-price airfares

Bloomberg

Australia’s government will subsidise 800,000 half-price air fares as part of a A$1.2 billion ($920 million) package to prop up the nation’s ailing tourism industry.
To run from April 1 to July 31, the discounted fares are designed to help tourism-dependent regions and should support airlines, hotels and hospitality venues, Prime Minister Scott Morrison said in a statement. The package also includes further support for the international aviation industry, and will expand a government-backed loan program to small and medium-sized businesses.
The subsidised tickets program “means more jobs and investment for the tourism and aviation sectors as Australia heads towards winning our fight against Covid-19 and the restrictions that have hurt so many businesses,” Morrison said.
Australia’s domestic and international aviation industry has been badly damaged by the pandemic, even as the nation has managed to restrict the waves of infections that have roiled Europe and the US.
While the government has provided billions in direct economic stimulus to help keep the economy afloat, it sees the need to deliver additional support as programs such as JobKeeper – which subsidizes businesses to keep employees — wind down at the end of the month.
The economy powered into 2021, with GDP jumping 3.1% in the final three months of last year from the prior quarter. Yet, the support package is a shot in the arm to an aviation industry shattered by the coronavirus
related travel restrictions.
Qantas Airways Ltd., which is cutting at least 8,500 jobs, lost about A$11 billion in revenue to the pandemic last year alone, more than half its normal annual sales. Smaller rival Virgin Australia Airlines is under new ownership after collapsing in 2020. Global air-travel isn’t expected to fully recover until 2024.
Qantas and Virgin Australia will receive financial support from April 1 to October 31 to help them maintain an agreed core international capability.
Extension of existing programs to September 30, including ensuring passenger and cargo movement on key routes; waiving security charges; and supporting zoos, aquariums and wildlife parks to maintain animal populations despite reduced revenue.
Expanding and extending its SME Loan Guarantee Scheme, targeting and tailoring it to support those businesses that have been relying on JobKeeper; increasing it from A$1 million to A$5 million, and increasing the maximum eligible revenue from A$50 million to A$250 million.
“We know there are sectors and regions across the country that are continuing to do it tough, which is why we will continue to support the economy with proportionate, timely, scalable and targeted assistance,” Treasurer Josh Frydenberg said in the statement.
Reflecting months of pent-up demand, bookings for holiday flights within Australia are 10% to 20% higher than before the pandemic, Gareth Evans, chief executive officer of low-cost carrier Jetstar, said. Qantas-owned Jetstar aims to fly 90% of its pre-coronavirus schedule this month, Evans said.
“With all the borders open, pretty much, it’s looking pretty positive,” Evans said at an aviation conference. Qantas has said it will operate 60% of its pre-virus domestic services this quarter, and 80% in the following three months.