Both Qantas and Virgin Australia are ending their government-subsidized international flights. The Australian Government had been underwriting some international flights for both airlines. The purpose of these repatriation-style flights was to get Australians home. Now, everyone who needs to get home should be home, and the government is set to turn the funding tap off.
The government paid to keep key international routes open
But it isn’t like there were a lot of flights to choose from in the first place. Throughout April, both Qantas and Virgin Australia operated several ad hoc repatriation flights. The unique nature of some routings created a frisson of interest.
Once the initial urgency was over, Qantas and Virgin Australia appeared set to cancel all of their international flying. Australia had closed its borders to all but its own citizens, and most other countries acted likewise.
But despite this, the Australian Government wanted to keep some core international routes open for essential and returning travelers. At the time, the deal was to operate flights to London, Los Angeles, Hong Kong, and Auckland.
“Many Australians will be able to get to one of these four destinations. They can do so knowing there will be an Australian airline to get them home,” said Australia’s Minister for Foreign Affairs, Marise Payne in April.
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A lot of money for a few services
Over the following two months, those four destinations were whittled down to just two; Los Angeles and London.
Most recently, Qantas has been operating a twice-weekly Boeing 787-9 Melbourne – Perth – London – Perth – Melbourne service and a weekly Melbourne – Los Angeles – Melbourne service. Virgin Australia has been operating a weekly Brisbane – Los Angeles – Brisbane flight.
Underwriting these flights throughout May alone has cost the Australian Government US$35 million. The Australian is reporting today that Qantas has received the bulk of government assistance to operate these flights. Virgin Australia has received just $6.5 million over the past few months. In contrast, Qantas has trousered a tidy $33 million.
Both Qantas and Virgin Australia have left the door open to continue operating their threadbare international schedules should the Australian Government care to continue underwriting them.
But the government has not indicated it will do so. In contrast, they have just extended their separate program underwriting domestic routes through till the end of September.
Why would the subsidies end?
There are a few possible reasons for this unwillingness. First, these flights operated primarily as repatriation flights. Everyone has had plenty of time to get home. Second, it is a matter of cost. There are indicators that the Australian Government is starting to tighten up on generous emergency funding packages and cash flows that benefited not only aviation but many other industries.
Third, it is becoming a little easier to travel in and out of Australia. While the border remains closed to most, Singapore Airlines, Emirates, and Etihad have all stepped up flying into Australia recently. It comes as their respective homeports (and others such as Hong Kong) begin to allow transit traffic. The net effect is that it’s easier to get to Australia than it was.
The combination of these factors may be behind the government’s viewpoint. With no sign of an imminent thaw in Australia’s strict border restrictions, it could be some time before airports like LAX see another Virgin Australia or Qantas plane.