Govt lands $300m package to help country airlines fight COVID-19

Coronavirus regional airline rescue deal flies in $300m from Canberra

Agribusiness
Aa

Federal aid to help pull the airline sector out of its coronavirus tailspin now totals more than $1 billion after a $300m initiative to help keep services flying to the bush

Aa

The regional aviation sector is cheering the federal government after scoring a further $300 million to help keep services flying to the bush despite free-falling passenger numbers caused by the coronavirus emergency.

However, the industry warned many in the "fragile" regional air services business, including tourist operators and flying schools, would not survive the pandemic's economic hit.

Deputy Prime Minister Michael McCormack has committed a $198m lifeline for six months to support the regional airline network.

Funding details are still awaited, but the money will focus on passenger and aero-medical services to 138 regional communities.

Another $100m is on the table to underwrite regional aviation companies after dire warnings of carriers facing imminent collapse were hammered home to Canberra by prominent regional airline Regional Express and other operators last week.

Rex to keep flying

Rex was set to shut its entire network at the weekend and stand down of 90 per cent of its staff.

The carrier has now confirmed the federal assistance package and support pledged by some state and local governments would enable it to keep flying to almost all 59 destinations it regularly services.

The Regional Aviation Association of Australia applauded Mr McCormack, who is also Transport Minister, for recognising the severity of the problem and ensuring the Commonwealth Government provided significant funds to enable air services to continue.

Chairman Jim Davis said while regional services provided the vital links so necessary to the wellbeing of many communities, state border closures and an almost total loss of patronage because of COVID-19 had left many county air service operators just days from closing.

Many important regional aviation businesses including tourist operators and flying schools that provide essential services will not survive - Jim Davis, Regional Aviation Association of Australia

The RAAA has around 100 members directly employing 2500 staff - many in regional areas - and carrying more than 2m passengers and 23m kilograms of freight annually.

The promised funds were "a lifeline" to these services.

"The damage caused by the COVID-19 virus to our fragile industry is extraordinary," he said.

"Many important regional aviation businesses including tourist operators and flying schools that provide essential services will not survive.

"However, it is highly gratifying the government has listened carefully to the industry's concerns and has moved to ensure that a nucleus of regional air services will remain to rebuild once this crisis has passed.

"Without that timely action many essential regional air services would have been lost forever".

Regional carriers 'smashed'

Mr McCormack agreed regional aviation had been "smashed" by the global pandemic.

He said regional centres such as those to his own electorate based on Wagga Wagga in southern NSW needed the freight, medical supplies and pharmaceuticals provided by airlines, even if far fewer passengers were able to travel during this tough time.

"The government wants regional airlines to keep their doors open, keep people employed, keep the cash flow happening and keep Australia safe and secure through this crisis," he said.

"In regional aviation alone there are 26,000 people employed."

RELATED READING:

About 12 commercial airlines, plus Qantas and Virgin, operated regular passenger services across regional Australia and Mr McCormack committed to continue working with the entire sector to keep services airborne.

The federal government has now provided $1 billion-plus in aviation help funds, having already announced $715m for larger airlines, including big rural carrier Regional Express.

Rex's deputy chairman John Sharp said all regional communities and residents should be extremely grateful for the latest regional aviation rescue initiative.

This package seeks to give these operators the best chance of staving off the prospects of going into administration - John Sharp, Regional Express

"This meaningful assistance package not only seeks to keep essential air services going, albeit at a reduced capacity, but also tries to prevent the existing regional aviation providers from collapsing."

About $198m would go specifically to ensuring the existing network of regular public transport carriers was maintained, while the $100m would assist all small regional operators overcome the sudden cash crunch created by the collapse in passenger bookings in the past fortnight.

"This package seeks to give these operators the best chance of staving off the prospects of going into administration," Mr Sharp said.

By mid week Rex would have a new national network schedule to be constructed based on prevailing passenger numbers on each route, the federal criteria for access to the assistance package, and priorities given to for states which had provided assistance.

Rex would exit some routes where there was no adequate support from local governments, thereby making the route unviable;

It was also working jointly with QantasLink on which company would provide services to 10 competitive ports, based on collaboration approval authorised by the Australian Competition and Consumer Commission late last week.

  • Start the day with all the big news in agriculture! Click here to sign up to receive our daily Farmonline.

The story Govt lands $300m package to help country airlines fight COVID-19 first appeared on Farm Online.

Aa

From the front page

Sponsored by