Aussie and Kiwi governments to stand behind airlines with over a billion dollars

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March 17, 2020
Virgin Australia

The Australian and New Zealand governments have announced significant support packages for their respective airlines and support industries.

The Australian Government package involves the refunding and ongoing waiving of a range of Government charges on the industry including aviation fuel excise, Airservices charges on domestic airline operations and domestic and regional aviation security charges.

The total cost of the measures is estimated to be A$715 million, with an upfront estimated benefit of A$159 million to its airlines for reimbursement of applicable charges paid by domestic airlines since 1 February 2020.

The Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said: “our response today demonstrates our commitment to supporting the aviation sector as we put Australia in the best position possible to deal with the COVID-19 outbreak.”

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“Our airlines run on tight budgets at the best of times and these past few weeks have been particularly tough. I’ve been speaking with Australian airline executives every day and will continue to work with them to make sure they receive the support they need.

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“Providing this assistance not only helps our airlines but also the entire aviation industry, regional Australians in particular and other industries such as tourism and trade, which depend on aviation.

The move is very important to the Australian community that they can book flights with confidence and thus support the tourism industry.

The Qantas Group welcomed the Federal Government’s support package for Australian aviation, helping it to deal with the fallout from coronavirus.

Qantas Group CEO, Alan Joyce, said: “This is very welcome support for the industry. We know there are a lot of calls for government assistance across the economy because of coronavirus but aviation has probably been the first and hardest hit. For all players to receive this support early on is a great help.

“The Deputy Prime Minister has stayed close to the airlines as this crisis has unfolded and that’s helped with the design of the package. The fact it’s retrospective gives us an immediate cash benefit as we deal with falling revenue, and its sized according to each airline.

“There are some tough weeks and possibly months ahead, but our focus is on getting through that so we’re ready to help with the recovery on the other side.”

Qantas
Qantas boss Alan Joyce with CFO Vanessa Hudson. Photo: Steve Creedy

Across the Tasman, the New Zealand aviation industry will benefit from a $NZ600 million package which is part of one of the largest per-capita stimulus announced of NZ$12 billion (US$7.30 billion).

Air New Zealand fares

The package is larger than that implemented during the global financial crisis and like the Australian commitment flags massive support for the airline sector.

New Zealand Prime Minister Jacinda Ardern said that “the government is pulling out all stops to protect the health of New Zealanders and the health of our economy.”

The country’s Finance Minister Grant Robertson added that the initial NZ$600 million support package for aviation would be followed by additional and separate measures for Air New Zealand.

He said that this package was just the start.