Australian government to subsidise half-price airfares as part of tourism reboot package

For the struggling tourism industry, the only way is up.
For the struggling tourism industry, the only way is up. Photo credit: Getty

Australia's Government will subsidise 800,000 domestic flights and offer cheap loans to small tourism operators as part of A$1.2 billion package to revive the travel sector, Prime Minister Scott Morrison says.

Tourism is one of Australia's biggest industries, worth more than A$60 billion and employing about 5 percent of the workforce. But the sector was crippled when the country shut its international borders in March 2020 to curtail the spread of COVID-19 - leaving tens of thousands of people on the country's wage-subsidy scheme.

Seeking to prop up the industry when the subsidy scheme ends this month, the Government will release another A$1.2 billion industry-wide stimulus package for the travel sector.

The Australian Government will subsidise 800,000 domestic flights between April 1 and July 31 while its international borders remain closed. It will pay 50 percent of the cost of flying to 13 destinations, and airlines have agreed to provide additional flights to those places.

"This is our ticket to recovery - 800,000 half-price air fares to get Australians travelling," Morrison said.

The Government will also provide support to Qantas and Virgin Australia to keep 8,600 workers employed, planes in "flight-ready condition" and international passenger services at a pre-pandemic levels.

The Qantas Group has welcomed the announcement of fresh support for Australian aviation and tourism.

"Pre-COVID, the Qantas Group helped to generate nearly A$13 billion in economic activity – the equivalent of almost 1 per cent of the nation's GDP. Targeted stimulus will help fast-track the return of that activity as well as support the retention of key skills vital to the future of Australian aviation," the airline company said in a statement.

It says the package will enable Qantas, QantasLink and Jetstar to:

  • Offer up to 32,000 fares per week discounted by 50 per cent of median prices to key regional destinations such as Far North Queensland, Launceston and Alice Springs, stimulating travel demand and driving tourism spending for four months.
  • Keep up to 7,500 skilled employees associated with its international operations connected to the business while Australia's borders remain closed.
  • Deliver essential, paid training for pilots, cabin crew and engineers and bring idle aircraft back to service in preparation for international flying to return.
  • Maintain key transport links on routes that otherwise would not be commercially viable.
  • Continue to deliver repatriation flights on behalf of the Federal Government to help bring Australians home.

Qantas Group CEO Alan Joyce said: "This support is fantastic news for aviation and for the thousands of businesses, big and small, that rely on the tourism industry.

Loans of up to A$5 million to tourism businesses such as tour companies will also be made available, including a two-year repayment holiday as the industry recovers.