The latest Morrison Government aviation announcement will do little to save Virgin Australia.
Labor welcomes the Government covering the costs of some trunk routes – it is particularly important to ensuring Australians can get home safely after completing quarantine, and to support ongoing essential travel and freight while Covid-19 travel restrictions are in place.
But, it is clearly not a rescue package for Virgin Australia; rather it covers the costs for a small number of flights between our major cities, following an earlier announcement for regional routes.
The Morrison Government must stop this piecemeal approach to our aviation industry and actually extend an urgent lifeline to Virgin Australia to support the airline and its 10,000 employees through this crisis.
If Scott Morrison and Michael McCormack do not – they are making an active decision to see one of our major airlines fail.
Such a result will have a devastating impact on Virgin’s employees and on our tourism, freight and services sectors, and will slow our recovery once the Covid-19 outbreak passes.
Comments from senior Morrison Government Ministers that it is happy for Virgin to be replaced by a foreign company do not serve Australians well and show an ignorance of what is happening in the global aviation industry.
If this is Scott Morrison’s approach, he must outline how he will guarantee a new entrant will seamlessly secure necessary approvals, procure aircraft and real estate, and recruit and save local staff, without slowing our economic recovery or undermining Australian workplace and aviation safety conditions.
In contrast, providing a real lifeline to Virgin Australia fits within Scott Morrison’s principles for economic response to this crisis – that measures must be proportionate, timely, scalable, targeted, aligned and temporary.
The Morrison Government has already shown a willingness to provide direct support to airlines with a $100 million package to address the cash flow crisis of a dozen regional airlines, including majority foreign-owned Regional Express.
It must now provide direct support to large aviation companies, like Virgin Australia, through extending or guaranteeing lines of credit and taking an equity stake.
Such an intervention will give the Government the temporary ability to support the airline through this crisis before the industry bounces back – and it will – when the Government can recoup its investment.
The Government has a responsibility to all Australians to ensure the current structure of the aviation industry is retained beyond this crisis as it supports jobs, promotes competition and ensures services regularly reach all Australians.
That is why Labor has sought to work with the Government in good faith to support our aviation sector. But, both Labor and the aviation sector have been clear that its announcements are not enough to support the whole aviation industry through this crisis.
The Morrison Government must also do better than boasting its aviation announcements made during this crisis amount to over one billion dollars – when only a small component of that funding actually goes to airlines.
With most of our fleets grounded, the largest component of the package goes to the Government itself – paying for the Government’s own fees and charges – and does little to support the ongoing viability of our airlines.
Giving up on Australia’s aviation industry is not an option for Labor. We will continue to play a constructive, responsible and supportive role through this crisis, including injecting a sense of urgency when it is absent.