Government to underwrite domestic flights to end of January

Qantas, Virgin Australia and Regional Express will be able to claim back any losses they incur on domestic flights until the end of January and on regional flights until the end of March under the extension of a government program intended to maintain air connections during the COVID-19 crisis.

The federal government has already paid out $150 million to the airlines through its Domestic Aviation Network Support program, which was set to expire on Wednesday, and its regional equivalent which was to expire on December 31.

Qantas and Virgin are flying a bare-bones network.
Qantas and Virgin are flying a bare-bones network. Credit:Jason South

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said extending the schemes, designed to encourage airlines to maintain routes which would otherwise be unviable due to low passenger numbers, would help the struggling tourism sector and boost regional economies.

“In regional Australia, flights are so central to local economies, underpinning many small businesses including tourism operators, whilst ensuring continued access to key medical supplies and personnel,” he said.


“We know regional tourism will help drive Australia’s economic recovery and today’s announcement of further support for key routes will be a big boost to local economies.”

The dollar figure airlines can claim back for loss-making flights under the scheme is uncapped and Mr McCormack’s office said the extension could be worth hundreds of millions of dollars. The cost of the scheme will depend on how many flights the airlines operate and the level demand for those flights.

The domestic scheme underwrites flights on Australia’s 50 busiest routes while the regional scheme is currently covering 114 routes between 111 regional and remote locations, ensuring the airlines do not run at a loss.

Airlines are still flying only bare-bones networks, with Qantas operating only around 20 per cent of its pre-COVID capacity and Virgin scheduling around 17 per cent of its pre-COVID schedule for October, which is unlikely to increase significantly until state-board restrictions ease.

However, Qantas said last week that it will increase the number of flights it was operating between Sydney and Adelaide after South Australia eased its travel restrictions.

Mr McCormack said that while the federal government was “doing our bit” by underwriting flights to maintain minimum connectivity, states and territories needed to do their bit by opening their borders.

The Australian Tourism Industry Council on Sunday welcomed $150 million in new federal tourism funding, including $50 million for nine regions heavily reliant on international visitors. However, ATIC’s executive director Simon Westaway said it was not immediately clear why those regions had been chosen over others.

“We want to ensure the funding goes to where it’s most desperately needed,” he said.

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